Core Insights - Three stocks are highlighted with strong momentum characteristics and a buy rank, including Onto Innovation Inc., Southern Copper Corporation, and Owens Corning [1][2][3] Company Summaries - **Onto Innovation Inc. (ONTO)**: - Zacks Rank 1 - Current year earnings estimate increased by 6.6% over the last 60 days - Shares gained 27.8% over the last three months, outperforming the S&P 500's 4.8% increase - Momentum Score of A [1] - **Southern Copper Corporation (SCCO)**: - Zacks Rank 1 - Current year earnings estimate increased by 14.7% over the last 60 days - Shares gained 57.1% over the last three months, significantly outperforming the S&P 500's 4.8% increase - Momentum Score of A [2] - **Owens Corning (OC)**: - Zacks Rank 1 - Current year earnings estimate increased by 10.5% over the last 60 days - Shares gained 22.3% over the last three months, also outperforming the S&P 500's 4.8% increase - Momentum Score of B [3]

Company Overview - Owens Corning is a global leader in building materials systems and composite solutions, established in 1938, and recognized for its innovation in glass fiber technology [11] - The company's product offerings include glass fiber used in composite materials for various high-performance markets, including transportation, electronics, marine, infrastructure, wind energy, insulation, and roofing applications [11] Investment Rating - Owens Corning holds a 2 (Buy) rating on the Zacks Rank, indicating a favorable investment outlook [12] - The company has a VGM Score of A, suggesting strong overall performance across value, growth, and momentum metrics [12] Momentum and Earnings Estimates - The Momentum Style Score for Owens Corning is B, with shares having increased by 8.2% over the past four weeks [12] - In the last 60 days, three analysts have revised their earnings estimates upwards for fiscal 2024, with the Zacks Consensus Estimate rising by $1.29 to $15.37 per share [12] - Owens Corning has an average earnings surprise of 17.4%, indicating a history of exceeding earnings expectations [12] Conclusion - With a solid Zacks Rank and high Momentum and VGM Style Scores, Owens Corning is positioned as a strong candidate for investors seeking growth opportunities [13]

Core Insights - Owens Corning is leveraging strong demand in its Roofing business, product innovation, and effective pricing strategies to enhance profitability [1] - The company has seen a significant stock price increase of 64.6% over the past year, outperforming the industry average [2] - Analysts have raised their earnings estimates for 2024, indicating a positive outlook for the company's growth potential [3] Product Innovation - Owens Corning launched 13 new or improved products in Q1 2024, including the PINKWRAP weather-resistant barrier [5] - In 2023, the company introduced 39 new or refreshed products across its divisions, focusing on performance and durability [5] - The expansion into multi-material systems for roofing is expected to enhance offerings and boost margins [5] Inorganic Growth Strategy - The company is pursuing strategic acquisitions to enhance its market position, with a focus on bolt-on acquisitions [6] - A notable acquisition is the planned purchase of Masonite for approximately $3.9 billion, expected to finalize in mid-2024 [7][9] - This acquisition will diversify Owens Corning's portfolio and strengthen its presence in the residential products market [9] Strategic Initiatives - Owens Corning's growth is supported by geographic and product expansion in its Insulation business, including new facilities [10] - The company is diversifying insulation materials for non-residential applications globally, which helped mitigate declines in net sales [11] - In the Composites division, the focus is on higher-value markets and new product lines, enhancing competitiveness [12] Financial Performance - The Roofing segment's net sales increased by 7% year-over-year to $957 million in Q1 2024, driven by strong demand for premium products [14] - EBIT and EBITDA margins improved significantly, reflecting positive pricing and favorable manufacturing costs [14] - The company anticipates continued revenue growth in the Roofing segment for Q2 2024 [14] Valuation - Despite strong performance, Owens Corning's stock is trading at a favorable valuation of 11.2X forward 12-month earnings compared to industry averages [15] - The combination of a solid Roofing business, product innovation, and inorganic growth strategies presents an attractive investment opportunity [15]

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the aim of buying high and selling higher, capitalizing on established price movements [1] - The Zacks Momentum Style Score helps define momentum characteristics, with Owens Corning (OC) currently holding a Momentum Style Score of B [2] - Style Scores complement the Zacks Rank, which has a strong track record of outperforming the market, with OC having a Zacks Rank of 2 (Buy) [3] Group 2: Owens Corning Performance Metrics - OC shares have increased by 1.14% over the past week, while the Zacks Building Products - Miscellaneous industry has risen by 2.96% [5] - Over the past quarter, OC shares have risen by 25.53%, and by 66.6% over the last year, significantly outperforming the S&P 500's increases of 5.3% and 28.9%, respectively [6] - The average 20-day trading volume for OC is 665,165 shares, indicating a bullish sign when combined with rising stock prices [7] Group 3: Earnings Outlook - In the past two months, three earnings estimates for OC have increased, raising the consensus estimate from $14.08 to $15.37 [9] - For the next fiscal year, two estimates have also moved upwards, with no downward revisions during the same period [9] Group 4: Conclusion - Considering the performance metrics and earnings outlook, OC is positioned as a 2 (Buy) stock with a Momentum Score of B, making it a potential short-term investment opportunity [10]

Company Performance - Owens Corning (OC) has gained approximately 18.5% year-to-date, outperforming the average gain of 11% for the Construction sector [4] - The Zacks Consensus Estimate for OC's full-year earnings has increased by 10.2% over the past quarter, indicating improving analyst sentiment [3] - Owens Corning holds a Zacks Rank of 2 (Buy), suggesting a positive outlook for the stock [3] Industry Comparison - Owens Corning is part of the Building Products - Miscellaneous industry, which includes 28 stocks and currently ranks 50 in the Zacks Industry Rank [5] - The average gain for stocks in the Building Products - Miscellaneous industry is 12.7% this year, indicating that OC is performing better than its peers [5] - In contrast, PulteGroup, another Construction stock, has returned 12.8% year-to-date and belongs to the Building Products - Home Builders industry, which has gained 6.6% this year and ranks 22 [4][6] Sector Overview - The Construction sector consists of 95 individual stocks and currently holds a Zacks Sector Rank of 1, indicating strong overall performance [2] - The Zacks Rank system emphasizes earnings estimates and revisions, helping to identify stocks poised to outperform the market [3]

Owens Corning (OC) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.The upward trend in estimate revisions for this construction materials company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation betwe ...

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Owens Corning (OC) reported impressive results in first-quarter 2024, with earnings and net sales surpassing the Zacks Consensus Estimate. Earnings increased on a year-over-year basis despite a net sales decline. Sales declined due to lower sales volumes in the Insulation and Composites segments. Owens Corning's shares dropped 1.4% on Apr 24 after the earnings release. Inside the Headlines The company reported adjusted earnings per share (EPS) of $3.59, which topped the consensus mark of $3.04 by 18.1% and ...

Financial Data and Key Metrics Changes - The company reported adjusted EBIT of $438 million for Q1 2024, significantly above the previous year, with adjusted EBIT margins at 19% and adjusted EBITDA margins at 25% [19][22] - Adjusted diluted earnings per share were $3.59, compared to $2.80 in the same quarter last year, reflecting strong operational execution [16][19] - The company had liquidity of approximately $5.6 billion, consisting of $1.3 billion in cash and $4.3 billion in available credit [11] Business Line Data and Key Metrics Changes - **Roofing**: Revenue grew by 7% year-over-year to $957 million, with EBIT of $286 million, up $77 million from last year, resulting in EBIT margins of 30% and EBITDA margins of 31% [12][22] - **Insulation**: Revenue was $904 million, a 2% decrease from the previous year, with EBIT of $161 million, up $5 million, and EBIT margins of 18% [21] - **Composites**: Sales decreased by 11% to $523 million, with EBIT of $46 million, down $3 million, resulting in EBIT margins of 9% [22] Market Data and Key Metrics Changes - The U.S. asphalt shingle market volume increased by 27% year-over-year, driven by strong market demand and storm-related needs [12] - North American residential insulation demand remained solid, while European markets faced challenges due to a weaker macroeconomic environment [16][21] Company Strategy and Development Direction - The company is focused on aligning its business units with an enterprise strategy centered on building and construction solutions, highlighted by the acquisition of Masonite, which expands its market to a total addressable market of $75 billion [8][9] - A strategic review of the glass reinforcement business is underway, as it does not align with the company's focus on residential and commercial building materials [9] Management's Comments on Operating Environment and Future Outlook - Management expects favorable conditions in North American building and construction markets, with continued demand for roofing products driven by repair and remodeling activities [30] - The company anticipates second-quarter results to be similar to the prior year, with flat sales and EBIT margins around 20% [30] Other Important Information - The company achieved a 28% reduction in Scope 1 and 2 emissions from a 2018 baseline, progressing towards a goal of 50% reduction by 2030 [7] - A cash dividend of $0.60 per share was declared in February, with a capital allocation strategy focused on returning approximately 50% of free cash flow to investors [12][20] Q&A Session Summary Question: Insights on insulation business pricing - Management indicated that additional price realization in Q2 reflects prior increases and expects continued momentum [36] Question: Comments on Masonite's architectural business divestiture - Management noted that the architectural business was not a strategic fit and supported Masonite's decision to seek alternatives [40][48] Question: Impact of packaging exit on roofing performance - The exit from the protective packaging business resulted in a revenue impact of approximately $25 million per quarter, expected to continue over the next few quarters [42][43] Question: Geographic market share changes in roofing - Management confirmed strong positions in the West and Rocky Mountains, with improvements in demand across other regions, but no significant share shifts [46] Question: Future pricing expectations in composites - Management expects pricing to remain under pressure but noted stabilization in demand and potential for improvement in the back half of the year [52][63]

Financial Performance - Net sales were $23 billion in Q1 2024, a decrease of 1% compared to $2331 billion in Q1 2023[7] - Adjusted EBIT increased to $438 million in Q1 2024 from $361 million in Q1 2023, representing 19% and 15% of net sales respectively[7] - Adjusted EBITDA rose to $565 million in Q1 2024, compared to $487 million in Q1 2023, accounting for 25% and 21% of net sales respectively[7] - Return on capital was 17% for the last twelve months[9] Business Segment Results - Roofing business net sales increased by 7% to $957 million in Q1 2024 from $895 million in Q1 2023, with EBIT at $286 million and 30% of net sales[17] - Insulation business net sales decreased by 2% to $904 million in Q1 2024 from $919 million in Q1 2023, with EBIT at $161 million and 18% of net sales[11, 21] - Composites business net sales decreased by 11% to $523 million in Q1 2024 from $585 million in Q1 2023, with EBIT at $46 million and 9% of net sales[34, 35] Capital Allocation and Outlook - Capital additions are expected to be approximately $550 million[15] - General corporate expenses are expected to range between $240 million and $250 million[15] - The company returned $182 million of free cash flow to shareholders through share repurchases and dividends[9]