JPMorgan Cautious on Owens Corning (OC) Due to Weak Demand, Inventory Destocking Impact on Q4

Core Viewpoint - Owens Corning is currently considered one of the most undervalued stocks on the NYSE, despite recent price target reductions by JPMorgan due to weak demand and inventory destocking impacting Q4 performance [1][3]. Financial Performance - In Q3 2025, Owens Corning reported revenues of $2.7 billion and adjusted EBITDA of $638 million, achieving a strong margin of 24% [2]. - The roofing and insulation segments showed significant structural improvements, with margins increasing by over 5% compared to similar market conditions over the past decade [2]. Market Conditions - The company is facing headwinds from weakening residential trends in the US and a quiet storm season, which has negatively impacted the roofing business [3]. - The absence of named storms in Q3 led to lower storm-related demand, contributing to an expected year-over-year revenue decline in roofing for Q4, estimated to account for about half of the decline [3]. Company Operations - Owens Corning operates in the residential and commercial building products sector across the US, Europe, Asia Pacific, and internationally, with four segments: Roofing, Insulation, Doors, and Composites [4]. Growth Initiatives - The company is investing in growth through the establishment of a new plant in Alabama for laminate shingles and a new fiberglass line in Kansas City to enhance production capabilities [3].