Owens Corning develops, manufactures and markets insulation, roofing, and fiberglass composites. The company was founded in 1938 and is based in Toledo, Ohio.
OC Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for OC, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Owens Corning ranked in the 77th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 375% on a DCF basis. As for the metrics that stood out in our discounted cash flow analysis of Owens Corning, consider:
Owens Corning's effective tax rate, as measured by taxes paid relative to net income, is at 0 -- greater than only 0% of US stocks with positive free cash flow.
Owens Corning's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -2.16. This coverage rate is greater than that of merely 14.27% of stocks we're observing for the purpose of forecasting via discounted cash flows.
The weighted average cost of capital for the company is 12. This value is greater than 83.6% stocks in the Basic Materials sector that generate free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Basic Materials that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as OC, try BECN, LPX, GFI, NX, and CCR.
Using recent actions and grades from TheStreet's Quant Ratings and layering on technical analysis of the charts of those stocks, Trifecta Stocks identifies five names each week that look bearish. While we will not be weighing in with fundamental analysis we hope this piece will give investors interested in stocks on the way down a good starting point to do further homework on the names. Owens Corning Inc. recently was downgraded to Sell with a D+ rating by TheStreet's Quant Ratings.
Owens Corning (NYSE: OC) today announced that it has priced $300 million in aggregate principal amount of a new series of its unsecured 3.875% senior notes due 2030 in an underwritten public offering under its effective shelf registration statement. The senior notes were offered at a price to the public of 99.891% of par.
Moody's Investors Service (Moody's) assigned a Baa3 rating to Owens Corning's proposed $300 million senior unsecured notes due 2030. OC's Baa3 senior unsecured rating is not impacted by the proposed transaction. Moody's views the proposed issuance as credit positive since proceeds will result in additional liquidity with about $530 million of cash on a pro forma basis at Q1 2020.