Owens Corning
OC
$121.60
+4.87%
Owens Corning is a building products manufacturer operating in the Construction Materials industry, producing residential roofing shingles and components, thermal and acoustical insulation, and doors and door systems across its Roofing, Insulation, and Doors segments, with the United States as its largest market. The company is a scaled, brand-recognized incumbent in North American building envelope materials rather than a disruptor, and its Roofing franchise has historically been its highest-margin earnings engine. The investor narrative is currently dominated by two competing forces: a reported buyout approach from Carlisle that briefly sent shares up nearly 11% in early July 2026, and a deteriorating fundamental backdrop marked by a Q1 2026 net loss of $105 million, a Q4 2025 loss of $297 million, and a stock that has fallen 11.2% over the past year against a 13.1% gain for the S&P 500. Debate centers on whether the recent earnings volatility reflects cyclical housing weakness and one-time charges or structural margin erosion, with the M&A angle providing a potential floor under the equity.…
OC
Owens Corning
$121.60
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 $146.31 and implied upside of +20.3% versus the current price.
Average Target
$146.31
0 analysts
Implied Upside
+20.3%
vs. current price
Analyst Count
—
covering this stock
Price Range
$106 - $198
Analyst target range
Coverage is solid with 16 analysts, and the consensus recommendation is Buy (mean rating 2.06 on a scale where lower is more bullish). The average target price of $146.94 implies roughly +28.6% upside from the current $114.23, a wide gap that reflects analysts valuing the stock on normalized earnings (consensus EPS of $13.40) rather than the depressed trailing results. The bullish tilt is reinforced by recent ratings activity: Wells Fargo, Citigroup, Evercore ISI, Barclays, and RBC all maintain Overweight/Outperform/Buy ratings through July-September 2026, with only Truist (Hold) and Goldman Sachs (Neutral) sitting on the sidelines.
The target range of $106 to $198 is exceptionally wide — the high target is about 73% above the current price and roughly 87% above the low target — signaling genuine disagreement about the earnings recovery path. The $198 high likely assumes a Carlisle buyout premium, multiple expansion on normalized EBITDA, and a housing recovery; the $106 low implies continued margin compression and no M&A premium. The absence of any downgrades in the recent ratings log is notable and suggests the sell-side is treating the recent losses as transitory, but the wide dispersion means position sizing should account for the possibility that the stock retests its $97.53 52-week low before the recovery thesis is validated.
Drowning in data?
Find the real signal!
Bulls vs Bears: OC Investment Factors
The bear case currently has stronger near-term evidence: revenue growth of 0.33% is effectively zero, the trailing twelve months produced a net loss with ROE of -13.55%, and the stock has underperformed SPY by 24.32 points over a year with momentum still deteriorating (-19.75% over three months). The bull case rests on interpretation rather than current results — that the losses are below-the-line charges (Q4 2025 other expenses of $510 million, Q3 2025 of $844 million) masking positive operating income of $482 million in Q2 2026, and that a 10.47x forward PE on $13.40 consensus EPS plus a $146.94 average target already discount a recovery. The single most important tension is whether the 2025-2026 charges are genuinely non-recurring or the leading edge of structural margin erosion in Roofing; if Q3 2026 confirms clean operating margins near 17%, the bull case wins decisively, but another charge-heavy quarter would validate the bears and put the $97.53 low in play.
Bullish
- Washed-out valuation versus own history: At a P/S of 0.92x and P/B of 2.42x, OC trades at or below the bottom of its own multi-year sales band of roughly 2.79x-7.31x and book band of 1.60x-3.38x. The forward PE of 10.47x on consensus FY EPS of $13.40 implies the market is pricing a full earnings recovery from a loss-making trailing base, leaving substantial re-rating room if normalization occurs.
- Analyst consensus firmly bullish: All 16 covering analysts carry a mean rating of 2.06 (Buy), with an average target of $146.94 implying +28.6% upside from $114.23. Wells Fargo, Citigroup, Evercore ISI, Barclays and RBC all maintain Overweight/Outperform/Buy through July-September 2026, and no downgrades appear in the recent ratings log.
- Losses are below-the-line, not operational: Q2 2026 operating income was $482 million (17.49% operating margin) and gross margin was 28.77%, yet trailing net margin is -5.17%. The gap is driven by non-operating charges — $510 million of other expenses in Q4 2025 and $844 million in Q3 2025 — suggesting core operations remain profitable even as reported EPS is negative.
- M&A floor from Carlisle approach: Reports of a buyout approach from Carlisle sent shares up nearly 11% in early July 2026, and the stock rallied from $124.12 on June 23 to $158.96 by June 30. A strategic acquirer validates the asset value and provides a potential bid floor that limits downside even if standalone fundamentals stay soft.
Bearish
- Revenue growth has stalled completely: Q2 2026 revenue of $2.756 billion grew just 0.33% year-over-year from $2.747 billion, and is down sharply from $3.046 billion in Q3 2024. With Roofing at $1.313 billion, Insulation at $971 million and Doors at $513 million, there is no segment offsetting the cyclical housing drag.
- Earnings volatility is extreme: The last four quarters swung from a $226 million profit (Q2 2026) to a $105 million loss (Q1 2026) and a $297 million loss (Q4 2025), with trailing EPS of -$0.056 and ROE of -13.55%. This is not a stable earnings base on which to underwrite a 10.47x forward multiple.
- Leverage leaves little cushion: Debt-to-equity of 1.597 and total debt to capitalization of 60.3% are elevated, with only $279 million of cash against $69 million of quarterly interest expense. The current ratio of 1.258 is thin, and free cash flow swung from -$387 million in Q1 2026 to +$199 million in Q2 2026 on working capital and heavy capex ($604 million in Q4 2025).
- Severe relative and absolute underperformance: OC is down 11.19% over one year versus a 13.13% gain for SPY, a -24.32 point relative strength gap, and down 19.75% over three months — worse than the one-year decline, meaning selling pressure is intensifying. The stock sits at just 26.8% of its 52-week range of $97.53-$159.91.
OC Technical Analysis
Owens Corning is in a sustained downtrend that has recently transitioned into a lower-range consolidation. The stock is down 11.19% over the past year versus a 13.13% gain for SPY, a relative strength gap of -24.32 percentage points, and at $114.23 it sits at roughly 26.8% of its 52-week range of $97.53 to $159.91. That positioning near the lower third of the annual range signals a market that has largely priced out momentum and is treating the name as a value/event-driven situation rather than a growth holding. Notably, the stock is still up 0.07% year-to-date, meaning the damage has been concentrated in the trailing twelve months rather than calendar 2026.
Short-term momentum is clearly negative and decelerating relative to the longer-term trend. The stock is down 7.04% over the past month and 19.75% over three months, with the 3-month decline far exceeding the 1-year decline of 11.19%, indicating the selling pressure has intensified rather than stabilized. Relative strength is negative across every measured window (-6.02 over 1 month, -22.60 over 3 months, -15.51 over 6 months), confirming the stock is losing ground to the market on all horizons. The 1-month underperformance of -6.02 points against a roughly flat SPY (-1.02%) suggests no mean-reversion bid has emerged yet, and the recent slide from the August high of $158.92 to $114.23 represents a roughly 28% drawdown in under three months.
Key technical levels are well defined: support sits at the 52-week low of $97.53, roughly 14.6% below the current price, while resistance is anchored at the 52-week high of $159.91, about 40% above. A breakdown below $97.53 would confirm a full trend failure and likely trigger momentum-driven selling, whereas a reclaim of the $140-$150 zone (the July-August consolidation shelf) would be the first evidence of a durable bottom. With a beta of 1.318, the stock is roughly 32% more volatile than the market, and a max drawdown of -33.41% underscores the position-sizing risk; the short ratio of 2.1 days is modest and does not suggest a crowded short base capable of fueling a violent squeeze.
Beta
1.32
1.32x market volatility
Max Drawdown
-31.4%
Largest decline past year
52-Week Range
$98-$160
Price range past year
Annual Return
-2.5%
Cumulative gain past year
| Period | OC Return | S&P 500 |
|---|---|---|
| 1m | +2.7% | +0.7% |
| 3m | -12.5% | +3.0% |
| 6m | -0.9% | +6.8% |
| 1y | -2.5% | +11.9% |
| ytd | +6.5% | +12.8% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
OC Fundamental Analysis
Revenue is essentially stagnating at a low level. Q2 2026 revenue came in at $2.756 billion, up just 0.33% year-over-year from $2.747 billion, a sharp deceleration from the $3.046 billion reported in Q3 2024. The sequential path has been choppy — $2.142 billion in Q4 2025, $2.265 billion in Q1 2026, then $2.756 billion in Q2 2026 — and segment data shows Roofing at $1.313 billion, Insulation at $971 million, and Doors at $513 million, with Roofing still the largest contributor. The near-flat top line implies the investment case is no longer about growth but about earnings quality and cyclical recovery timing in residential construction.
Profitability is highly uneven and currently impaired on a trailing basis. Q2 2026 net income was $226 million with a gross margin of 28.77% and operating margin of 17.49%, but Q1 2026 posted a net loss of $105 million (gross margin 22.87%) and Q4 2025 a loss of $297 million (gross margin 23.86%). The trailing net margin is -5.17% and trailing EPS is -$0.056, while ROE is -13.55% — a stark contrast to the 31.60% gross margin and 13.21% net margin delivered in Q2 2025. The gap between the 28.5% gross margin and the negative net margin points to large below-the-line charges (Q4 2025 other expenses of $510 million, Q3 2025 other expenses of $844 million) rather than core operating collapse, since operating income remained positive at $482 million in Q2 2026.
Balance sheet leverage is elevated and cash generation is inconsistent. Debt-to-equity stands at 1.597, total debt to capitalization at 60.3%, and the current ratio at 1.258, with cash of only $279 million at Q2 2026 against meaningful debt service (interest expense of $69 million in the quarter). Free cash flow TTM is $550 million, but the quarterly pattern is volatile: +$199 million in Q2 2026, -$387 million in Q1 2026, and -$14 million in Q4 2025, driven by working capital swings and heavy capex ($604 million in Q4 2025 alone). ROA of 5.79% and a dividend yield of 2.48% (payout ratio -44.4% on trailing losses) suggest the company can service obligations but has limited internal cushion, making the balance sheet a genuine risk factor if housing demand stays soft.
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
Open an Account, get $2 TSLA now!
Valuation Analysis: Is OC Overvalued?
Because trailing net income is negative (EPS of -$0.056), the trailing PE of -17.88 is not meaningful, so the appropriate primary metric is the forward PE of 10.47x, supplemented by EV/EBITDA of 14.35x and P/S of 0.92x. The forward PE of 10.47x against consensus FY EPS of $13.40 implies the market is pricing a sharp earnings recovery from the current loss-making trailing base, and the enormous gap between trailing and forward multiples reflects the market's bet that 2025-2026 charges are non-recurring rather than structural.
On peer comparison, the P/S of 0.92x and EV/Sales of 1.475x are low in absolute terms for a building products franchise with a 28.5% gross margin, though the EV/EBITDA of 14.35x is less obviously cheap and reflects the depressed EBITDA base. The PEG ratio of 0.097 is distorted by the negative trailing earnings base and should be disregarded. Without a clean industry-average multiple in the provided data, the most defensible read is that the stock trades at a discount on sales (0.92x) but a premium on EV/EBITDA (14.35x) relative to where a cyclical materials name would normally clear, implying the market is already capitalizing a recovery.
Historically, Owens Corning's P/S has ranged from roughly 2.79x (Q2 2022) to 7.31x (Q1 2024), and its P/B has ranged from about 1.60x to 3.38x; the current P/S of 0.92x and P/B of 2.42x place the stock at or below the bottom of its own multi-year sales band. That is a meaningful signal: either the market is pricing genuine fundamental deterioration (the negative trailing margins support this) or the stock is offering a rare value entry if earnings normalize toward the $13.40 consensus. The 2.48% dividend yield, well above the ~0.35-0.50% yields seen through 2022-2025, further supports the "washed-out valuation" interpretation.
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
14.4x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are concentrated in earnings quality and balance sheet flexibility. Trailing EPS of -$0.056 and ROE of -13.55% sit alongside debt-to-equity of 1.597 and total debt to capitalization of 60.3%, with only $279 million of cash against $69 million of quarterly interest expense. Free cash flow TTM of $550 million masks violent quarterly swings (+$199 million in Q2 2026, -$387 million in Q1 2026, -$14 million in Q4 2025) driven by working capital and capex that hit $604 million in Q4 2025 alone. Revenue concentration adds to the risk: Roofing at $1.313 billion of the $2.756 billion Q2 total is the highest-margin engine, so any shingle pricing or volume weakness hits earnings disproportionately, and the 1.258 current ratio leaves limited liquidity buffer if housing stays soft.
Market and competitive risks center on valuation compression and cyclical sensitivity. The stock's beta of 1.318 means it amplifies market moves by roughly 32%, and its -33.41% max drawdown demonstrates how violently it reprices in risk-off periods. EV/EBITDA of 14.35x is a premium multiple for a cyclical materials name on a depressed EBITDA base, so any disappointment forces multiple compression on top of earnings cuts. Recent news highlights the macro channel: mortgage rates hitting a four-week high on geopolitical tension in Iran directly delays the housing recovery OC needs, and the Carlisle buyout report that lifted shares nearly 11% in July is explicitly "far from certain" — its collapse would remove the bid floor. The stock has also lost ground to the market on every measured horizon (relative strength of -6.02 over one month, -22.60 over three months, -15.51 over six months), signaling sector rotation away from housing-linked materials.
The worst-case scenario is a housing recovery that fails to arrive combined with a withdrawn Carlisle approach and another charge-heavy quarter. In that chain, the M&A premium evaporates, the $13.40 consensus EPS gets cut, and the 10.47x forward multiple compresses toward the $106 analyst low — roughly -7% from $114.23 — before momentum carries it to the $97.53 52-week low, about -14.6%. A full retest of the -33.41% max drawdown from the recent $158.92 August high would imply a price near $105.8, consistent with the low target. Realistically, an investor could lose 15-25% from current levels in this adverse path, with the $97.53 level as the key line that, if broken, would confirm full trend failure and likely trigger momentum-driven selling.