Owens Corning (OC): Pricing Environment Improving - Jefferies

Jefferies analyst, Phillip NG, reiterated his Buy rating on shares of Owens Corning (NYSE: OC) and raised his price target to $65 after 4Q earnings showed an improvement in pricing.

The analyst is encouraged that prices have stabilized in 4Q16, and management has seen some traction from the Jan price increase. He stated "we believe OC has guided conservatively by assuming 35% incremental margins, so any accretive pricing action in 2H17 should leave room for upside and push incrementals closer to 50%, while noting pricing inflation adjusted is still 35-40% (20% nominally) from the last peak". OC expects 6% sales growth in 2017, which will be impacted by the lost TopBuild business early in the year, but should see strength from improved demand from new residential construction.

The new PT of $65 is up from $60.

For an analyst ratings summary and ratings history on Owens Corning click here. For more ratings news on Owens Corning click here.

Shares of Owens Corning closed at $54.52 yesterday.

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