On Friday, Argus made a positive adjustment to the financial outlook of Owens Corning (NYSE: NYSE:OC), a prominent manufacturer of composite and building materials. The firm increased the 12-month price target for Owens Corning (NYSE:GLW) to $175, up from the previous target of $155, while reaffirming a Buy rating on the stock.
Owens Corning, known for its cyclical nature, has been influenced by the recent performance of the housing and construction markets, which have demonstrated strength in recent times.
Despite potential headwinds from rising interest rates that could temper growth, Owens Corning's Roofing division continues to expand. However, the company's Insulation and Composites segments are facing challenges.
The company's financial health has been noted as robust, with a clean balance sheet and a recent dividend increase of 15%. This move by management suggests a strong confidence in Owens Corning's future and a dedication to delivering shareholder value.
From a technical standpoint, Argus suggests that Owens Corning's shares have exhibited a bullish trend with patterns of higher highs and higher lows since June 2022. When evaluated against fundamental valuation metrics, Owens Corning's shares have been trading at a significant discount compared to other companies in the building supply sector.
Argus supports the position that the discount on Owens Corning's shares is no longer justified based on the company's financial strength and valuation fundamentals. The new price target of $175 reflects a price-to-earnings multiple of 12 times the projected earnings per share for 2024, which remains below the average of the peer group.
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