The firm also raised 2015 earnings estimates to $2.15 from $2.11, with 2016 earnings estimates increased to $3.20 from $3.15 per share.
Owens Corning is a holding company that is engaged in composite and building materials systems with products range from glass fiber to insulation and roofing.
"We are seeing much better discipline across the industry, with the roofing manufacturers announcing a 5% to 7% price increase for May and the distributors taking a much more aggressive stance managing inventory," Jefferies analysts said.
With underlying fundamentals on the upswing, limited capex spend, and a sizable net operating loss less than $2 billion, the firm believed that free cash flow generation should be strong and expected Owens Corning to return cash back to shareholders more aggressively the next few years.
Shares of Owens Corning are declining, down 0.41% to $41.57 in afternoon trading Wednesday.
Separately, TheStreet Ratings team rates OWENS CORNING as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate OWENS CORNING (OC) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The debt-to-equity ratio is somewhat low, currently at 0.63, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.01, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has increased to -$149.00 million or 45.22% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 33.78%.
- OWENS CORNING has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, OWENS CORNING increased its bottom line by earning $1.91 versus $1.71 in the prior year. This year, the market expects an improvement in earnings ($2.14 versus $1.91).
- OC, with its decline in revenue, slightly underperformed the industry average of 0.9%. Since the same quarter one year prior, revenues slightly dropped by 5.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: OC Ratings Report