OC
Owens Corning
$136.37
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Mild
·
Conviction
Fair Value
Trading 8.5% below fair value
You pay
$136.37
Bear
$109.28
Fair
$149.02
Bull
$188.76
Bear
$109.28
-19.9%
$9.54 × 14x + net cash
Fair
$149.02
+9.3%
$9.54 × 18x + net cash
Bull
$188.76
+38.4%
$9.54 × 22x + net cash
Key Value Driver
Through-cycle normalized EPS ($9.54)
Implied Market Multiple
14.3x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $162.83 from 43 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $149.02 per share.
Warnings
This company has a built-in lending arm whose debt is mixed in with the main business. We capped the debt adjustment to avoid overstating what the core business owes.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing