Analyst Forecasts Just Became More Bearish On Owens Corning (NYSE:OC)

The analysts covering Owens Corning (NYSE:OC) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the consensus from 15 analysts covering Owens Corning is for revenues of US$11b in 2025, implying a discernible 3.7% decline in sales compared to the last 12 months. Statutory earnings per share are presumed to shoot up 95% to US$14.77. Prior to this update, the analysts had been forecasting revenues of US$12b and earnings per share (EPS) of US$15.95 in 2025. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a substantial drop in revenue estimates and a small dip in EPS estimates to boot.

View our latest analysis for Owens Corning

Despite the cuts to forecast earnings, there was no real change to the US$200 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Owens Corning's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 3.7% by the end of 2025. This indicates a significant reduction from annual growth of 9.1% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.3% annually for the foreseeable future. It's pretty clear that Owens Corning's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Owens Corning's revenues are expected to grow slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Owens Corning after today.

Worse, Owens Corning is labouring under a substantial debt burden, which - if today's forecasts prove accurate - the forecast downgrade could potentially exacerbate. To see more of our financial analysis, you can click through to our free platform to learn more about its balance sheet and specific concerns we've identified.

We also provide an overview of the Owens Corning Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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