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Bull of the Day: Owens Corning (OC)

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The building products world has a pretty bright future in today’s economic environment. Things are humming along in a variety of different areas, with home construction picking up—as evidenced by the recent housing starts report—and low supply in a number of key locations (along with high rent prices) suggests that plenty of construction will need to take place in order to get the market into more of a balance.

That is why looking to companies like Owens Corning ((OC - Free Report) ) could be an excellent idea right now. OC is in a number of different corners of the building community, but especially pertinent to our discussion today is its roofing business (which is its biggest by revenue) and the insulation segment.

Both of these areas have been picking up steam in recent months, and could be in a position to continue this trend in the quarters to come too. These hopes for a continuation of the positive trend are especially apparent if we look to the recent earnings for Owens Corning, as well as some of the latest analyst estimate changes for the stock.

Estimates & Earnings

The surging trends in OC are evident if we look to the most recent earnings report. The company beat earnings estimates by nearly 40% for the most recent quarter, while net sales increased in all three of its main divisions. Additionally, the roofing division, which is key to our discussion, saw nearly 46% growth in terms of sales for year-over-year results.

Clearly, the positive trends are already starting to materialize. But what do analysts think about the near-future for OC? Well, we have seen two estimates go higher in the past week for both the current quarter and the current year, while the longer-term trend has also been positive too.

Owens Corning Inc Price, Consensus and EPS Surprise

Owens Corning Inc Price, Consensus and EPS Surprise | Owens Corning Inc Quote

The consensus estimate has risen by nearly 6% in the past two months as a result of some of these moves, while we are seeing positive results for the current year and next year time frames as well. Best of all though, the most recent estimates have been even higher than the consensus as of late. The most accurate estimate comes in at $1.11/share, which is roughly 4.7% higher than the current quarter consensus estimate.

With numbers like this and an average beat in the past four quarters of close to 30%, it shouldn’t be a surprise that this stock has earned itself a Zacks Rank #1 (Strong Buy). Thus, we are looking for more outperformance from this company in the weeks ahead, and for it to continue the great trend we see in this market.

Bottom Line

The building products space has a solid rank right now, and there are plenty of impressive underlying fundamentals for this corner of the market too. OC is already starting to feel part of this trend, and that could continue this quarter as well.

The stock appears well-positioned for an earnings beat later this week, while it has a great history in earnings season too. Add in a top momentum grade of ‘A’, and there are a lot of reasons to like this stock ahead of its earnings once more.


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