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Investing.com - RBC Capital has lowered its price target on Owens Corning (NYSE:OC) to $174.00 from $180.00 while maintaining an Outperform rating on the building materials manufacturer. The stock, currently trading at $131.43, appears undervalued according to InvestingPro analysis, with the company maintaining strong financial health scores.
The firm cited weaker industry trends in roofing and increased weakness in new residential construction as key factors behind the adjustment. RBC expects Owens Corning’s shingle volumes to continue outperforming the broader market due to the company’s laminate ramp and tighter inventory positions compared to competitors. InvestingPro data shows the company’s strong financial position, with liquid assets exceeding short-term obligations.
For the third quarter, RBC projects Owens Corning’s roofing revenues at $1.26 billion, representing a 3% year-over-year increase, with volumes down approximately 1%. The firm maintained its third-quarter earnings per share estimate at $3.79, slightly above the Street consensus of $3.76.
RBC reduced its fourth-quarter estimates, now forecasting a 5% volume decline compared to its previous projection of a 2% decrease. The firm lowered its fourth-quarter EPS estimate to $2.40 from $2.59, below the Street consensus of $2.68.
Looking ahead to fiscal year 2026, RBC decreased its adjusted earnings per share estimate to $13.50 from $13.87, positioning it below the Street consensus of $14.22. The new price target is based on a 13x multiple of FY2025 earnings.
In other recent news, Owens Corning reported stronger-than-expected earnings for the second quarter of 2025, with earnings per share reaching $4.21, surpassing the forecast of $3.82. The company’s revenue also exceeded expectations, totaling $2.75 billion against a projected $2.71 billion. Owens Corning announced a quarterly cash dividend of $0.69 per share, payable in November to shareholders of record in October. UBS reiterated its Buy rating on the company with a price target of $210, highlighting strong execution and a positive third-quarter outlook despite a projected $50 million gross impact from tariffs. Meanwhile, BofA Securities lowered its price target for Owens Corning to $168 from $180, citing a weaker outlook for roofing volumes, which are expected to decline by 4% year-over-year in 2025. Truist Securities also reduced its price target to $135 from $165, maintaining a Hold rating due to recent weaknesses in roofing volumes. These developments reflect a mix of positive earnings performance and cautious outlooks from analysts.
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