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Owens Corning (OC) Sells Russian Operations to De-Risk Business
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In-line with its exit plan from the Russian market to de-risk business, Owens Corning (OC - Free Report) closed the divesture of its operations in the country to a Russia-based producer of carbon fiber and fiber-based items, Umatex.
The divesture includes a Composites manufacturing plant in Gous-Khroustalny and an Insulation manufacturing plant in Tver/Izoplit. Financial terms of the deal were not yet disclosed. Russia generated approximately $85 million in net sales in the first nine months of 2022.
This along, Owens Corning has reaffirmed its fourth-quarter 2022 guidance. For the fourth quarter, the company expects a moderate end market with the changing macroeconomic environment. For the quarter, it expects net sales and adjusted EBIT to grow modestly year over year.
Chair and chief executive officer of OC, Brian Chambers, stated, “This announcement represents the final step in our process to fully exit our operations in Russia.”
Focus on Inorganic Moves
In order to position its business well among its peers and reduce uncertainty, OC has undertaken various inorganic moves. On Sep 13, it entered into an agreement to sell the Russian operations to forgo the uncertain impact of the Russian invasion of Ukraine on business. The Russian operations and associated assets represent approximately 1% of annual consolidated net sales and consolidated assets, respectively.
Earlier in July, it concluded the sale of the European portion of the dry-use chopped strands ("DUCS") product line, located in Chambéry, France, within the Composites’ segment.
Apart from the planned divestures, acquisitions are an important part of Owens Corning’s growth strategy. The company is assessing its investment in bolt-on acquisitions that leverage its commercial, operational and geographic strength and expand its functional areas of offering. So far in 2022, the company has acquired five businesses.
Lately, on Sep 1, it acquired the remaining 50% interest in its joint venture company — Fiberteq, LLC. This joint venture between Owens Corning and IKO Industries produces high-quality wet-formed fiberglass mats for roofing applications. The acquisition advances Composites’ strategy to focus on high-value material solutions and expands Owens Corning's capacity to produce non-woven mats.
Image Source: Zacks Investment Research
Shares of this Zacks Rank #3 (Hold) company have gained 7% in the past three months, outperformed the industry’s 0.7% rally. The company is benefiting from market-leading businesses, innovative products and process technologies, and capabilities.
Some better-ranked stocks in the same space are CRH plc (CRH - Free Report) , Janus International Group, Inc. (JBI - Free Report) and United Rentals, Inc. (URI - Free Report) , each carrying a Zacks Rank #2 (Buy).
CRH manufactures cement, concrete products, aggregates, roofing, insulation and other building materials.
CRH’s expected earnings growth rate for 2022 is 22.1%. The Zacks Consensus Estimate for current-year and next-year earnings has improved to $3.98 and $3.43 per share from $3.46 and $3.42, respectively, over the past 30 days.
Headquartered in Temple, GA, Janus manufactures and supplies turn-key self-storage and commercial and industrial building solutions. Solid backlog levels, an impressive project pipeline, productivity improvements and commercial actions, including pricing, are expected to drive growth. The company is expected to benefit from its one-stop-shop offering with a leading market share position in self-storage doors and related design and installation services.
Janus’ earnings for 2022 are expected to rise 21%. The Zacks Consensus Estimate for current-year and next-year earnings has improved to 75 cents and 88 cents per share from 69 cents and 80 cents, respectively, over the past 30 days.
United Rentals is the largest equipment rental company in the world, with an integrated network of 1,390 rental locations in the United States, Canada and Europe.
URI’s expected earnings growth rates for 2022 and 2023 are 47.3% and 12.5%, respectively. The Zacks Consensus Estimate for current-year and next-year earnings has improved to $32.50 and $36.57 per share from $32.41 and $36.27, respectively, over the past 30 days.
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Owens Corning (OC) Sells Russian Operations to De-Risk Business
In-line with its exit plan from the Russian market to de-risk business, Owens Corning (OC - Free Report) closed the divesture of its operations in the country to a Russia-based producer of carbon fiber and fiber-based items, Umatex.
The divesture includes a Composites manufacturing plant in Gous-Khroustalny and an Insulation manufacturing plant in Tver/Izoplit. Financial terms of the deal were not yet disclosed. Russia generated approximately $85 million in net sales in the first nine months of 2022.
This along, Owens Corning has reaffirmed its fourth-quarter 2022 guidance. For the fourth quarter, the company expects a moderate end market with the changing macroeconomic environment. For the quarter, it expects net sales and adjusted EBIT to grow modestly year over year.
Chair and chief executive officer of OC, Brian Chambers, stated, “This announcement represents the final step in our process to fully exit our operations in Russia.”
Focus on Inorganic Moves
In order to position its business well among its peers and reduce uncertainty, OC has undertaken various inorganic moves. On Sep 13, it entered into an agreement to sell the Russian operations to forgo the uncertain impact of the Russian invasion of Ukraine on business. The Russian operations and associated assets represent approximately 1% of annual consolidated net sales and consolidated assets, respectively.
Earlier in July, it concluded the sale of the European portion of the dry-use chopped strands ("DUCS") product line, located in Chambéry, France, within the Composites’ segment.
Apart from the planned divestures, acquisitions are an important part of Owens Corning’s growth strategy. The company is assessing its investment in bolt-on acquisitions that leverage its commercial, operational and geographic strength and expand its functional areas of offering. So far in 2022, the company has acquired five businesses.
Lately, on Sep 1, it acquired the remaining 50% interest in its joint venture company — Fiberteq, LLC. This joint venture between Owens Corning and IKO Industries produces high-quality wet-formed fiberglass mats for roofing applications. The acquisition advances Composites’ strategy to focus on high-value material solutions and expands Owens Corning's capacity to produce non-woven mats.
Image Source: Zacks Investment Research
Shares of this Zacks Rank #3 (Hold) company have gained 7% in the past three months, outperformed the industry’s 0.7% rally. The company is benefiting from market-leading businesses, innovative products and process technologies, and capabilities.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Picks
Some better-ranked stocks in the same space are CRH plc (CRH - Free Report) , Janus International Group, Inc. (JBI - Free Report) and United Rentals, Inc. (URI - Free Report) , each carrying a Zacks Rank #2 (Buy).
CRH manufactures cement, concrete products, aggregates, roofing, insulation and other building materials.
CRH’s expected earnings growth rate for 2022 is 22.1%. The Zacks Consensus Estimate for current-year and next-year earnings has improved to $3.98 and $3.43 per share from $3.46 and $3.42, respectively, over the past 30 days.
Headquartered in Temple, GA, Janus manufactures and supplies turn-key self-storage and commercial and industrial building solutions. Solid backlog levels, an impressive project pipeline, productivity improvements and commercial actions, including pricing, are expected to drive growth. The company is expected to benefit from its one-stop-shop offering with a leading market share position in self-storage doors and related design and installation services.
Janus’ earnings for 2022 are expected to rise 21%. The Zacks Consensus Estimate for current-year and next-year earnings has improved to 75 cents and 88 cents per share from 69 cents and 80 cents, respectively, over the past 30 days.
United Rentals is the largest equipment rental company in the world, with an integrated network of 1,390 rental locations in the United States, Canada and Europe.
URI’s expected earnings growth rates for 2022 and 2023 are 47.3% and 12.5%, respectively. The Zacks Consensus Estimate for current-year and next-year earnings has improved to $32.50 and $36.57 per share from $32.41 and $36.27, respectively, over the past 30 days.