NEW YORK (TheStreet) -- Shares of Owens Illinois (OI - Get Report) are gaining by 6.97% to $21.48 on strong volume in mid-morning trading on Tuesday, following a rating upgrade to "buy" from "neutral" at Bank of America/Merrill Lynch.

The firm upped its rating on the glass containers manufacturer based on a valuation call, as well as a preference for can makers over glass makers and expectations for a "touch more" momentum in Europe next year, Theflyonthewall.com reports.

Bank of America/Merrill Lynch upped its price target by $1 on Owens Illinois stock to $28 from $27 this morning.

So far today, 1.29 million shares of Owens Illinois have exchanged hands as compared to its average daily volume of 1.74 million shares.

Owens Illinois is a Perrysburg, OH-based glass container for the food and beverage industries manufacture with about 75 plants in more than 20 countries.

Separately, TheStreet Ratings team rates OWENS-ILLINOIS INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate OWENS-ILLINOIS INC (OI) a HOLD. The primary factors that have impacted our rating are mixed – some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strongest point has been its a solid financial position based on a variety of debt and liquidity measures that we have looked at. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • OI, with its decline in revenue, underperformed when compared the industry average of 1.8%. Since the same quarter one year prior, revenues fell by 14.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • OWENS-ILLINOIS INC 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, OWENS-ILLINOIS INC reported lower earnings of $0.59 versus $1.20 in the prior year. This year, the market expects an improvement in earnings ($2.09 versus $0.59).
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 34.79%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 67.50% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • The gross profit margin for OWENS-ILLINOIS INC is rather low; currently it is at 24.37%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.59% trails that of the industry average.
  • Net operating cash flow has declined marginally to $166.00 million or 2.35% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • You can view the full analysis from the report here: OI Ratings Report