Owens Corning
OC
$142.34
+2.44%
Owens Corning is a building products company that manufactures and sells roofing, insulation, and door systems primarily for residential and commercial construction. As a market leader in the U.S. roofing and insulation segments, it benefits from a strong brand and extensive distribution network. The current investor narrative centers on a potential buyout offer from Carlisle, which sent shares surging in early July, alongside ongoing debates about the impact of elevated mortgage rates on housing demand and the company's recent earnings volatility.…
OC
Owens Corning
$142.34
Related headlines
OC 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Owens Corning's 12-month outlook, with a consensus price target around $164.57 and implied upside of +15.6% versus the current price.
Average Target
$164.57
0 analysts
Implied Upside
+15.6%
vs. current price
Analyst Count
—
covering this stock
Price Range
$125 - $193
Analyst target range
The stock is covered by 14 analysts, with a consensus recommendation of 'Buy' (mean rating 1.75 on a 1-5 scale). The average target price is $160.71, implying approximately +11.7% upside from the current price of $143.91. The distribution leans bullish, with recent ratings from RBC Capital (Outperform), Deutsche Bank (Buy), and Barclays (Overweight), while Goldman Sachs and JP Morgan maintain Neutral. The target range spans from a low of $125.00 to a high of $188.00. The high target of $188 assumes a successful turnaround, potential acquisition premium from Carlisle, or multiple expansion, while the low target of $125 prices in continued margin pressure and weak housing demand. The spread of $63 (33.5% of the average) indicates moderate uncertainty. Recent upgrades from Evercore ISI (to Outperform) and consistent bullish stances from multiple firms suggest improving sentiment, though the buyout speculation adds an event-driven element that could skew targets.
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Bulls vs Bears: OC Investment Factors
Owens Corning presents a mixed picture: the stock is historically cheap on P/S and P/B metrics, enjoys strong analyst support, and has a potential buyout catalyst from Carlisle. However, fundamental deterioration—declining revenue, negative net income, and cash burn—raises serious concerns. The bull case hinges on a successful acquisition or a sharp earnings recovery, while the bear case centers on continued operational weakness and macro headwinds. Currently, the bull side has slightly stronger evidence due to the buyout speculation and low valuation, but the most critical tension is whether the Carlisle deal materializes; if it does, shares could reach $188, but if it fails, the stock could fall to $125 or below.
Bullish
- Buyout Offer from Carlisle: Reports of a buyout offer from Carlisle sent shares surging nearly 11% in early July, indicating a potential acquisition premium. The high analyst target of $188 implies 30.6% upside from the current price, partly reflecting this event-driven catalyst.
- Low Valuation vs. History: The trailing P/S ratio of 0.92x is near the bottom of its five-year range of 2.8x–7.3x, suggesting the stock is historically cheap. The P/B ratio of 2.42x is also below its historical average of ~2.5x, supporting a value thesis.
- Analyst Consensus Buy: With 14 analysts covering the stock, the consensus is 'Buy' (mean rating 1.75/5) and the average target price of $160.71 implies +11.7% upside. Recent upgrades from Evercore ISI and bullish stances from RBC, Deutsche Bank, and Barclays reflect improving sentiment.
- Strong Recent Momentum: The stock has gained 26.07% YTD and 16.26% in the past month, significantly outperforming the S&P 500 (9.0% YTD, 0.31% 1-month). This momentum is supported by a beta of 1.301, amplifying upside moves.
Bearish
- Negative Earnings and Revenue Decline: Q1 2026 revenue fell 10.47% YoY to $2.265B, and net income was -$105M, marking the third loss in four quarters. Gross margin compressed to 22.87% from 28.62% a year ago, reflecting cost pressures and weak demand.
- Elevated Leverage and Cash Burn: Debt-to-equity stands at 1.60, and free cash flow was -$387M in Q1 2026, a sharp reversal from positive FCF in prior quarters. Operating cash flow of -$154M and capex of $233M indicate financial strain.
- Buyout Uncertainty: The Carlisle buyout is far from certain, as noted by The Motley Fool. If the deal falls through, the stock could lose the acquisition premium, potentially dropping back to pre-rumor levels around $130.
- Macro Headwinds from Mortgage Rates: Elevated mortgage rates, recently hitting a four-week high due to geopolitical tensions, are pressuring the housing market. As a residential construction supplier, OC is directly exposed to this headwind, which could further delay demand recovery.
OC Technical Analysis
The stock is in a strong uptrend, with a 1-year price change of +1.57% but a YTD gain of +26.07%. The current price of $143.91 sits at 90% of the 52-week range ($97.53–$159.91), indicating the stock is near its highs and reflecting robust momentum. This positioning suggests bullish sentiment but also raises caution about potential overextension given the rapid recent run-up. Short-term momentum is accelerating sharply, with 1-month and 3-month price changes of +16.26% and +17.15%, respectively, far outpacing the 1-year return. This divergence signals a recent catalyst-driven surge, likely tied to the Carlisle buyout rumors, rather than a sustainable organic trend. The relative strength versus SPY is strongly positive over 1-month (+15.95%) but negative over 1-year (-16.78%), highlighting a recent reversal in relative performance. Key support lies near the 52-week low of $97.53, while resistance is at the 52-week high of $159.91. A breakout above $159.91 would signal further upside, while a breakdown below $97.53 would indicate a bearish reversal. With a beta of 1.301, the stock is 30% more volatile than the market, amplifying both upside and downside risks.
Beta
1.30
1.30x market volatility
Max Drawdown
-37.7%
Largest decline past year
52-Week Range
$98-$160
Price range past year
Annual Return
-1.5%
Cumulative gain past year
| Period | OC Return | S&P 500 |
|---|---|---|
| 1m | +6.1% | +0.8% |
| 3m | +13.3% | +3.5% |
| 6m | +14.4% | +7.2% |
| 1y | -1.5% | +16.5% |
| ytd | +24.7% | +8.4% |
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OC Fundamental Analysis
Revenue has been volatile and recently declining. Q1 2026 revenue was $2.265B, down 10.47% YoY from $2.53B in Q1 2025. The trailing four quarters show a mixed trend: Q2 2025 revenue was $2.747B, Q3 2025 $2.684B, Q4 2025 $2.142B, and Q1 2026 $2.265B. The Roofing segment generated $960M in Q1 2026, followed by Insulation at $867M and Doors at $475M, with Roofing being the primary growth driver historically. The revenue decline raises concerns about end-market demand, particularly in residential construction. Profitability has deteriorated sharply. Net income was -$105M in Q1 2026, compared to -$93M in Q1 2025, and gross margin compressed to 22.87% from 28.62% a year ago. The company has posted negative net income in three of the last four quarters, with only Q2 2025 showing a profit of $363M. Operating margin fell to 10.24% in Q1 2026 from 16.92% in Q1 2025, reflecting cost pressures and lower volumes. The balance sheet shows elevated leverage with a debt-to-equity ratio of 1.60 and a current ratio of 1.26, indicating moderate liquidity. Free cash flow was -$387M in Q1 2026, a sharp reversal from positive FCF in prior quarters, driven by negative operating cash flow of -$154M and capex of $233M. The TTM free cash flow of $480M provides some cushion, but the recent cash burn is concerning. ROE is negative at -13.55%, underscoring the earnings challenges.
Quarterly Revenue
$2.3B
2026-03
Revenue YoY Growth
-10.5%
YoY Comparison
Gross Margin
22.9%
Latest Quarter
Free Cash Flow
$480000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is OC Overvalued?
Since net income is negative (TTM net income of -$105M in Q1 2026), the P/E ratio is not meaningful. Therefore, we lead with the price-to-sales (P/S) ratio. The trailing P/S is 0.92x, while the forward P/E is 12.22x (based on positive expected earnings). The gap between the negative trailing P/E and positive forward P/E implies the market expects a sharp earnings recovery. Compared to the Construction Materials industry, OC's P/S of 0.92x is at a discount to the sector average (not provided, but typically higher for materials companies). The EV/Sales multiple of 1.77x also suggests a reasonable valuation relative to peers. Historically, OC's P/S ratio has ranged from roughly 2.8x to 7.3x over the past five years, with the current 0.92x near the bottom of that range. This low multiple reflects the recent earnings losses and revenue decline, but could also indicate a value opportunity if the company returns to profitability. The P/B ratio of 2.42x is also below its historical average of ~2.5x, further supporting a potential undervaluation narrative.
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
Financial & Operational Risks: Owens Corning's financial health is under pressure. Revenue declined 10.47% YoY in Q1 2026, and the company posted a net loss of $105M, with negative net income in three of the last four quarters. Gross margin fell to 22.87% from 28.62% a year ago, and operating margin dropped to 10.24% from 16.92%. The debt-to-equity ratio of 1.60 indicates elevated leverage, and free cash flow turned negative at -$387M in Q1 2026, driven by negative operating cash flow of -$154M. These factors suggest the company is burning cash and may face liquidity constraints if the downturn persists.
Market & Competitive Risks: The stock's beta of 1.301 makes it 30% more volatile than the market, amplifying downside in a selloff. Valuation compression is a risk if the market re-rates the stock lower due to persistent losses; the trailing P/E is negative, and the forward P/E of 12.22x assumes a sharp earnings recovery that may not materialize. Competitive pressures from other building materials companies and regulatory headwinds (e.g., housing policies) could further erode margins. Recent news highlights that elevated mortgage rates are delaying housing recovery, directly impacting OC's residential-focused segments.
Worst-Case Scenario: If the Carlisle buyout falls through and housing demand continues to weaken, the stock could retest its 52-week low of $97.53, representing a -32.2% decline from the current price of $143.91. This scenario would likely involve continued revenue declines, negative earnings, and potential dividend cuts. The historical max drawdown of -37.68% suggests that a drop to $90 is possible in a severe downturn, implying a loss of up to -37% from current levels.
