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Owens Corning (OC) Registers a Bigger Fall Than the Market: Important Facts to Note

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In the latest trading session, Owens Corning (OC - Free Report) closed at $132.60, marking a -2.84% move from the previous day. The stock trailed the S&P 500, which registered a daily loss of 0.84%. On the other hand, the Dow registered a loss of 0.7%, and the technology-centric Nasdaq decreased by 0.91%.

Coming into today, shares of the construction materials company had lost 5.91% in the past month. In that same time, the Construction sector gained 0%, while the S&P 500 gained 1.44%.

The investment community will be paying close attention to the earnings performance of Owens Corning in its upcoming release. On that day, Owens Corning is projected to report earnings of $3.8 per share, which would represent a year-over-year decline of 18.1%. Alongside, our most recent consensus estimate is anticipating revenue of $2.7 billion, indicating a 3.03% downward movement from the same quarter last year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $13.24 per share and a revenue of $10.38 billion, representing changes of -16.78% and -5.46%, respectively, from the prior year.

Investors should also pay attention to any latest changes in analyst estimates for Owens Corning. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Currently, Owens Corning is carrying a Zacks Rank of #4 (Sell).

From a valuation perspective, Owens Corning is currently exchanging hands at a Forward P/E ratio of 10.31. Its industry sports an average Forward P/E of 16.58, so one might conclude that Owens Corning is trading at a discount comparatively.

We can also see that OC currently has a PEG ratio of 3.6. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Building Products - Miscellaneous was holding an average PEG ratio of 1.68 at yesterday's closing price.

The Building Products - Miscellaneous industry is part of the Construction sector. At present, this industry carries a Zacks Industry Rank of 69, placing it within the top 29% of over 250 industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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