At its 2021 virtual Investor Day, which was held on November 10, fiberglass composites manufacturer Owens Corning (OC) announced a new enterprise strategy as well as financial targets for 2024.
The Ohio-based company is engaged in the development and production of insulation, roofing, and fiberglass composites and related materials and products.
Owens’ shares closed 3.8% down on Wednesday at $94.01.
Financial Targets
By 2024, the company aims to reach annual revenue of $10 billion with operating margins coming in around the mid-teens percentage. It also targets to maintain its capital intensity level at around 4% to 5% of revenue.
Furthermore, Owens aims to generate free cash flow conversion of at least 100% of adjusted net income as well as return nearly 50% of free cash flow to shareholders.
Management Comments
The Executive Vice-President and Chief Financial Officer at Owens, Ken Parks, said, “While the team is excited about our financial results to date, we are even more excited about delivering on these three-year targets as we build Owens Corning for the future. The initiatives our leaders shared today are focused on generating this growth and driving this performance with the foundation in place to make it happen.”
Details of the New Strategy
As part of the new strategy, Owens aims to develop prefabricated building solutions, strengthen its position in the core building and construction products, and expand to increase the number of its multi-material solutions.
Moreover, it expects the new strategy to help generate stronger financial results. (See Insiders’ Hot Stocks on TipRanks)
Wall Street’s Take
On November 8, Bank of America (BAC) analyst Rafe Jadrosich reinstated coverage on the stock with a Buy rating and a price target of $115 (22.3% upside potential).
In a research note to investors, the analyst said, “Owens Corning is raising prices faster than costs, which will support revenue and margins in 2022.”
Analyst Recommendation
Overall, the stock has a Moderate Buy consensus rating based on 3 Buys and 4 Holds. The average Owens Corning price target of $110.86 implies nearly 18% upside potential. Shares have gained 35.7% over the past year.
Investor Opinion
TipRanks’ Stock Investors tool shows that investors currently have a Very Negative stance on Owens, with 15% of investors on TipRanks decreasing their exposure to the stock over the past 30 days.
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