Owens Corning
OC
$114.68
-4.26%
Owens Corning is a building products manufacturer operating in the Construction Materials industry, producing roofing shingles and asphalt materials, thermal and acoustical insulation, and doors and door systems through its three reportable segments: Roofing, Insulation, and Doors. The company is a market leader in North American residential roofing and a major player in insulation, with the Roofing segment generating the largest share of revenue and the United States accounting for the majority of sales. The current investor narrative is dominated by a reported buyout approach from Carlisle Companies that briefly sent shares surging nearly 11% in early July 2026, even as the deal remains uncertain. This M&A speculation is layered on top of a deeply uneven fundamental picture, with the company swinging between profitable and loss-making quarters over the past two years and revenue growth essentially flat. Investors are also weighing housing-market sensitivity, as elevated mortgage rates and geopolitical pressure on rates continue to cloud the residential construction outlook that underpins demand for OC's core products.…
OC
Owens Corning
$114.68
Related headlines
Investment Opinion: Should I buy OC Today?
The synthesized recommendation is Hold. The core thesis is that Owens Corning offers deep value on forward earnings (forward PE of 9.94) and significant analyst upside (average target of $172.20, implying +45.5%), but these are offset by stalled revenue growth of 0.33%, negative trailing net margin of -5.17%, and accelerating price declines. The analyst consensus is 'buy' with a mean of 1.706, yet the stock has fallen 21.65% over three months, suggesting the market is pricing in risks that analysts may be underestimating.
Supporting evidence for a Hold includes the PS ratio of 0.924, which is at the very bottom of its multi-year range (2.79 to 5.85), and the forward PE of 9.94, which is well below the broad market average. However, revenue growth has stalled at 0.33% YoY, and the company has posted three loss-making quarters in the past six, with a trailing net margin of -5.17%. Free cash flow is positive at $550 million but lumpy, ranging from -$387 million in Q1 2026 to +$199 million in Q2 2026. The dividend yield of 2.48% is attractive, but the payout ratio of -44.4% is negative due to trailing losses, raising sustainability concerns.
The biggest risks that could invalidate the thesis are a continued housing downturn, failure to achieve the consensus EPS recovery to $14.09, and the collapse of M&A talks. This Hold would upgrade to Buy if the company demonstrates two consecutive quarters of positive net income and revenue growth accelerates above 5%, or if a confirmed buyout offer emerges. It would downgrade to Sell if revenue declines further, gross margins fall below 25%, or the stock breaks below the 52-week low of $97.53. Relative to its history and peers, the stock appears undervalued on forward earnings but fairly valued to overvalued on trailing metrics given the negative earnings.
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OC 12-Month Price Forecast
The forward-looking view is cautiously neutral, balancing deep valuation support against significant fundamental uncertainty. The stock trades at a forward PE of 9.94 and a PS of 0.924, both well below historical norms, but this discount reflects legitimate concerns about earnings durability given three loss-making quarters in the past six. The analyst consensus of 'buy' with a $172.20 target provides a bullish anchor, but the market's persistent selling suggests skepticism about the recovery timeline. The M&A speculation adds a binary catalyst that could override fundamentals. I would upgrade to bullish if the company delivers two consecutive quarters of positive net income and revenue growth accelerates above 5%, or if a confirmed buyout offer emerges. I would downgrade to bearish if gross margins fall below 25%, revenue declines further, or the stock breaks below the 52-week low of $97.53.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Owens Corning's 12-month outlook, with a consensus price target around $165.06 and implied upside of +43.9% versus the current price.
Average Target
$165.06
0 analysts
Implied Upside
+43.9%
vs. current price
Analyst Count
—
covering this stock
Price Range
$118 - $198
Analyst target range
The stock is covered by 15 analysts with a consensus recommendation of "buy" and a recommendation mean of 1.706 (on a scale where 1 is a strong buy), indicating a bullish tilt. The average price target is $172.20, which implies roughly +45.5% upside from the current price of $118.36, a substantial gap that reflects analyst confidence in a recovery. The consensus is clearly bullish, with the average target well above the current price and the recommendation mean firmly in buy territory, though the stock's recent price weakness has widened the implied upside considerably. The target range spans from a low of $140.00 to a high of $198.00, a spread of $58 or about 41% of the low target, which signals meaningful disagreement among analysts about the magnitude of the recovery. The high target of $198.00 implies roughly +67% upside and likely assumes successful execution on margin recovery, a housing-market rebound, and possibly a favorable M&A outcome, while the low target of $140.00 still implies about +18% upside and prices in a more modest earnings recovery with continued housing headwinds. Institutional ratings show a stable-to-constructive pattern, with Wells Fargo maintaining Overweight as recently as September 11, 2026, and Citigroup, Evercore ISI, and Barclays all reiterating Buy or Outperform ratings in August 2026, while Truist and Goldman Sachs remain more cautious at Hold and Neutral. The absence of any downgrades in the recent ratings history and the clustering of reiterations around the Q2 earnings date suggest analysts are holding their ground despite the stock's decline, which could mean either conviction in the recovery thesis or lagging adjustment to the deteriorating price action. The wide target spread combined with the stock trading near the bottom of its 52-week range indicates high uncertainty, and investors should weigh the bullish consensus against the reality that the shares have fallen 21.65% over three months even as targets remain elevated.
Bulls vs Bears: OC Investment Factors
The bear case currently has stronger evidence, driven by stalled revenue growth of 0.33%, negative trailing net margin of -5.17%, and accelerating price declines of -21.65% over three months. The bull case rests on a deep valuation discount (PS of 0.924 vs. historical 2.79-5.85), a forward PE of 9.94 implying an earnings recovery, and analyst targets suggesting 45.5% upside. The single most important tension is whether the forward earnings recovery to $14.09 EPS materializes; if it does, the stock is deeply undervalued, but if losses recur, the low multiple is a value trap. The M&A speculation adds a binary catalyst that could override fundamentals in either direction.
Bullish
- Deep valuation discount to history: The PS ratio of 0.924 sits dramatically below the historical range of 2.79 (Q2 2022) to 5.85 (Q2 2024), and the PB ratio of 2.42 is near the low end of its multi-year band. This compression suggests the market has priced in severe fundamental deterioration, leaving room for multiple expansion if earnings normalize.
- Analyst consensus implies 45% upside: 15 analysts rate the stock a 'buy' with a mean recommendation of 1.706 and an average target of $172.20, implying +45.5% upside from $118.36. The low target of $140 still offers +18% upside, indicating even the most cautious analyst sees meaningful recovery.
- Forward PE of 9.94 signals earnings recovery: Despite negative trailing EPS of -$0.056, the forward PE of 9.94 is well below the broad market average, reflecting consensus EPS of $14.09 for the forward period. If this recovery materializes, the stock is priced for a sharp earnings rebound.
- Positive free cash flow and capital returns: Trailing free cash flow is positive at $550 million, and the company returned $208 million via buybacks and $64 million in dividends in Q2 2026 alone. The 2.48% dividend yield is attractive, though the negative payout ratio of -44.4% raises sustainability questions.
Bearish
- Revenue growth has stalled at 0.33% YoY: Q2 2026 revenue of $2.756 billion grew just 0.33% from $2.747 billion a year earlier, and the business has shrunk from its Q3 2024 peak of $3.046 billion. Flat top-line growth tied to housing-market sensitivity limits organic expansion.
- Highly volatile and currently unprofitable: Trailing net margin is -5.17% with EPS of -$0.056, and the company swung between a $226 million profit in Q2 2026 and a $297 million loss in Q4 2025. Recurring large non-operating charges, including $844 million in Q3 2025, distort profitability and raise earnings-quality concerns.
- Margin compression and leverage: Gross margin fell from 31.60% in Q2 2025 to 28.77% in Q2 2026, and operating margin declined from 20.71% to 17.02%. With a debt-to-equity ratio of 1.597 and a current ratio of 1.258, the balance sheet carries meaningful leverage and a thin liquidity cushion.
- Severe relative underperformance: The stock is down 15.99% over one year versus SPY's +15.01%, a relative strength of -30.99 percentage points. The 3-month change of -21.65% and 1-month change of -11.84% show the decline is accelerating, not stabilizing.
OC Technical Analysis
Owens Corning is in a broad downtrend over the trailing year, with the 1-year price change at -15.99% versus a +15.01% gain for SPY, producing a relative strength of -30.99 percentage points. At the current price of $118.36, the stock sits at roughly 33% of its 52-week range of $97.53 to $159.91, meaning it is trading in the lower third of its annual band and closer to the lows than the highs. This positioning reflects a market that has largely priced out momentum, and while it can signal a value opportunity, the persistent underperformance versus the index suggests caution rather than a clean bottoming setup. The 6-month change of +11.83% shows the stock did stage a meaningful recovery off its lows earlier in the year, but that advance has since been substantially retraced. Short-term momentum is clearly negative and decelerating: the 1-month change is -11.84% and the 3-month change is -21.65%, both far worse than the 1-year figure, indicating the decline has accelerated in recent months rather than stabilized. This divergence between the positive 6-month and sharply negative 1-month and 3-month readings signals a failed rally and a resumption of the primary downtrend, with the stock giving back its mid-year gains. Relative strength versus SPY is negative across every window, from -5.52 over 6 months to -30.99 over 1 year, confirming the weakness is stock-specific rather than purely market-driven. The 52-week low of $97.53 is the key support level, and a breakdown below it would signal a fresh leg lower and likely trigger momentum-selling; the 52-week high of $159.91 stands as major resistance, and only a sustained break above the recent $140-$158 congestion zone would repair the trend. With a beta of 1.319, the stock is roughly 32% more volatile than the market, meaning position sizing should be scaled down accordingly, and the max drawdown of -37.68% underscores the real risk of holding through a full decline. The short ratio of 2.42 indicates short interest is moderate and not yet at levels that would suggest a crowded short or imminent squeeze.
Beta
1.32
1.32x market volatility
Max Drawdown
-37.7%
Largest decline past year
52-Week Range
$98-$160
Price range past year
Annual Return
-14.0%
Cumulative gain past year
| Period | OC Return | S&P 500 |
|---|---|---|
| 1m | -17.3% | +0.9% |
| 3m | -18.2% | +3.4% |
| 6m | +0.3% | +14.4% |
| 1y | -14.0% | +16.2% |
| ytd | +0.5% | +14.0% |
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OC Fundamental Analysis
Revenue growth has essentially stalled, with the most recent quarter (Q2 2026, ended June 30) posting $2.756 billion in revenue against $2.747 billion a year earlier, a year-over-year growth rate of just 0.33%. The multi-quarter trend is choppy rather than directional: revenue moved from $2.142 billion in Q4 2025 to $2.265 billion in Q1 2026 to $2.756 billion in Q2 2026, but the year-ago comparisons show Q2 2025 at $2.747 billion and Q3 2024 at $3.046 billion, indicating the business has actually shrunk from its 2024 peak levels. Segment data shows Roofing is the largest contributor at $1.313 billion, followed by Insulation at $971 million and Doors at $513 million, with intersegment eliminations of -$41 million; the concentration in Roofing ties the company's fortunes tightly to residential construction activity. Flat top-line growth combined with housing-market headwinds implies the investment case currently rests more on margin management and M&A optionality than on organic expansion. Profitability is highly volatile and the company is currently unprofitable on a trailing basis, with a net margin of -5.17% and trailing EPS of -$0.056, though the most recent quarter was solidly profitable with $226 million of net income on a gross margin of 28.77%. The quarterly pattern is erratic: Q2 2026 net income of $226 million followed a Q1 2026 loss of $105 million and a Q4 2025 loss of $297 million, while Q2 2025 earned $363 million, showing both sequential improvement and year-over-year deterioration. Gross margin has compressed from 31.60% in Q2 2025 to 28.77% in Q2 2026, and the operating margin of 17.02% in the latest quarter, while healthy in absolute terms, is down from 20.71% a year earlier. The recurring pattern of large non-operating charges, including $844 million of other expenses in Q3 2025 and $510 million in Q4 2025, is the primary driver of the loss quarters and warrants close scrutiny as it distorts the headline profitability picture. The balance sheet carries meaningful leverage, with a debt-to-equity ratio of 1.597 and a current ratio of 1.258, leaving a relatively thin liquidity cushion. Free cash flow is positive at $550 million on a trailing basis but lumpy, ranging from -$387 million in Q1 2026 to +$199 million in Q2 2026, and the company returned cash aggressively with $208 million of buybacks and $64 million of dividends in the latest quarter alone. ROE is negative at -13.55% on a trailing basis, reflecting the loss quarters, while ROA is positive at 5.79%, and the cash flow-to-debt ratio of 0.069 from the historical ratios data signals that internally generated cash covers only a small fraction of the debt load. The dividend yield of 2.48% is attractive but the payout ratio of -44.4% is negative because of trailing losses, raising a question about dividend sustainability if losses recur.
Quarterly Revenue
$2.8B
2026-06
Revenue YoY Growth
+0.3%
YoY Comparison
Gross Margin
28.8%
Latest Quarter
Free Cash Flow
$550000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is OC Overvalued?
Because trailing net income is negative (EPS of -$0.056 and a trailing PE of -17.88), the PE ratio is not meaningful and I am leading with the PS ratio of 0.924 as the primary valuation metric, supplemented by the forward PE of 9.94 which becomes relevant given analysts expect a return to profitability. The gap between the meaningless trailing PE and the forward PE of 9.94 is enormous and implies the market expects a sharp earnings recovery, with consensus estimated EPS averaging $14.09 for the forward period. The EV/EBITDA of 15.53 and EV/Sales of 1.498 provide additional context, with the EV/EBITDA multiple appearing rich relative to the depressed earnings base. On a peer comparison basis, the PS ratio of 0.924 is low in absolute terms and the forward PE of 9.94 is well below the broad market average, suggesting the stock trades at a discount to the sector on forward earnings, though the negative trailing net margin of -5.17% and the erratic quarterly results justify some discount. The PEG ratio of 0.097 is extremely low, but this metric is unreliable here because it is distorted by the negative or near-zero trailing earnings base rather than reflecting genuine undervaluation. The premium or discount assessment is complicated by the fact that OC's profitability is far below what is typical for a stable building-products company, so the low forward multiple may reflect legitimate skepticism about earnings durability rather than a pure bargain. Historically, OC's PS ratio has ranged from roughly 2.79 in Q2 2022 to 5.85 in Q2 2024, and the current PS of 0.924 is dramatically below that entire historical band, sitting at the very bottom of its multi-year range. Similarly, the PB ratio of 2.42 is near the low end of its historical range, which has spanned from about 1.60 in mid-2022 to 3.38 in Q2 2026. This compression to multi-year valuation lows suggests the market is pricing in either significant fundamental deterioration or a value opportunity, and the negative trailing earnings and flat revenue growth lean toward the former interpretation unless the earnings recovery materializes.
PE
-17.9x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 4x~16x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
15.5x
Enterprise Value Multiple
Investment Risk Disclosure
Owens Corning faces significant financial and operational risks. The company's trailing net margin is -5.17% with EPS of -$0.056, and it has swung between profitable and loss-making quarters, including a $297 million loss in Q4 2025 and a $105 million loss in Q1 2026. Gross margin has compressed from 31.60% in Q2 2025 to 28.77% in Q2 2026, and operating margin fell from 20.71% to 17.02% over the same period. The debt-to-equity ratio of 1.597 and current ratio of 1.258 indicate meaningful leverage and a thin liquidity cushion, while the cash flow-to-debt ratio of 0.069 shows internally generated cash covers only a small fraction of the debt load. Recurring large non-operating charges, such as $844 million in Q3 2025 and $510 million in Q4 2025, distort headline profitability and raise concerns about earnings quality.
Market and competitive risks are substantial. The stock trades at a PS ratio of 0.924, dramatically below its historical range of 2.79 to 5.85, which could reflect legitimate skepticism about earnings durability rather than a pure bargain. With a beta of 1.319, the stock is roughly 32% more volatile than the market, and its relative strength versus SPY is negative across every window, from -5.52 over 6 months to -30.99 over 1 year. The housing market remains under pressure, with mortgage rates recently hitting a four-week high due to geopolitical tensions in Iran, delaying any recovery in residential construction. Additionally, the reported buyout approach from Carlisle remains uncertain; if the deal falls through, the stock could give back its 11% surge and face renewed selling pressure.
In a worst-case scenario, a continued housing downturn, failure of the earnings recovery, and the collapse of M&A talks could drive the stock to its 52-week low of $97.53, representing a decline of approximately -17.6% from the current price of $118.36. If the company fails to return to profitability and analysts downgrade their targets toward the low end of $140, the stock could still face downward pressure. The max drawdown of -37.68% over the past year underscores the real risk of holding through a full decline. In this adverse scenario, an investor could lose 17.6% to the 52-week low, or up to 37.7% in a more severe downturn matching the historical max drawdown.
FAQ
The key risks ranked by severity are: 1) Financial risk: negative trailing net margin of -5.17% and high debt-to-equity of 1.597, with a cash flow-to-debt ratio of only 0.069, meaning internally generated cash covers a small fraction of debt. 2) Market risk: high beta of 1.319 and severe relative underperformance, with the stock down 15.99% over one year versus SPY's +15.01%. 3) Competitive/housing risk: revenue concentration in Roofing ($1.313 billion of Q2 2026 revenue) ties fortunes to residential construction, which is pressured by elevated mortgage rates. 4) Company-specific risk: recurring large non-operating charges, such as $844 million in Q3 2025, distort earnings and raise quality concerns, while the uncertain Carlisle buyout could collapse and remove the M&A premium.
The 12-month forecast has three scenarios: Bull case (25% probability) targets $172-$198, assuming a successful earnings recovery and/or a confirmed buyout. Base case (50% probability) targets $140-$172, assuming gradual recovery and flat revenue growth. Bear case (25% probability) targets $97.53-$140, assuming continued housing downturn and failure to achieve profitability. The base case is most likely, with the key assumption that forward EPS materializes in the $12-$14 range and gross margins hold between 28% and 30%. The wide target range reflects high uncertainty, and the stock's actual path will depend heavily on housing market conditions and the outcome of M&A talks.
OC appears undervalued on forward earnings but fairly valued to overvalued on trailing metrics. The forward PE of 9.94 is well below the broad market average, and the PS ratio of 0.924 is dramatically below its historical range of 2.79 to 5.85. The PB ratio of 2.42 is also near the low end of its historical band. However, the trailing PE is negative at -17.88 due to a net margin of -5.17%, and the EV/EBITDA of 15.53 appears rich relative to depressed earnings. The market is pricing in a sharp earnings recovery to $14.09 EPS, and if that fails to materialize, the stock could be overvalued. The low multiples suggest the market expects significant fundamental deterioration or views the earnings as unsustainable.
From a risk/reward perspective, OC presents a mixed picture. The stock trades at $118.36, with a forward PE of 9.94 and a PS of 0.924, both well below historical averages, and analysts see 45.5% upside to their average target of $172.20. However, the company has a negative trailing net margin of -5.17%, revenue growth of just 0.33%, and the stock is down 21.65% over three months. The biggest downside risk is a break below the 52-week low of $97.53, which would represent a -17.6% loss. It could be a good buy for value investors with a high risk tolerance who believe in the earnings recovery and housing rebound, but it is not suitable for conservative investors given the volatility and leverage.
OC is more suitable for long-term investment than short-term trading, but with caveats. The stock has a beta of 1.319, making it 32% more volatile than the market, and a max drawdown of -37.68% over the past year, which makes short-term trading risky. The dividend yield of 2.48% provides some income, but the negative payout ratio of -44.4% raises sustainability questions. Earnings visibility is low due to erratic quarterly results and recurring charges. A long-term investor with a 3-5 year horizon could benefit from a housing cycle recovery and multiple expansion, but should be prepared for significant volatility. A minimum holding period of 2-3 years is suggested to ride out the current downturn and allow the earnings recovery to play out.