Owens Corning (OC): what the price assumes

In the published model solve dated 2026-Q2, anchored at $152.91, Owens Corning (OC) is priced for +4.8% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-01.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/OC

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

Solve inputs: computed at a 9% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6pp.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

Every valuation family lands below the price. The price therefore sits beyond what those standard frames encode.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that call it expensive: Asset, Earnings, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.5%); the inversion above states its own rate.

Per-Model Detail (n=8)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• Owens Corning is a North American building-products company whose profit engine is roofing: laminate asphalt shingles sold into a repair-and-remodel market where storm damage, not the housing cycle, drives much of the demand, so the segment's sales "do not always follow seasonal home improvement, remodeling and new construction industry patterns".
• The biggest risk is that the trailing year is a trough, not a base: 2025 segment EBITDA fell $121 million in Roofing and $97 million in Insulation, the Doors reporting unit took a goodwill impairment, and net debt near $5.6 billion sits against thin trailing operating income, so the balance sheet has less room if demand stays soft.
• What moves the stock next is corporate action, not the next print: Carlisle Companies has made an unsolicited approach valued above $10 billion, the glass-reinforcements sale closed April 30, 2026, and management has committed to about $1 billion of 2026 shareholder returns.

Bull Case

The number that does not fit the obvious narrative is the price itself. Owens Corning trades at $128 while its trailing operating income is thin enough that most earnings-based and asset-based methods read the stock as expensive. A company having a bad year that the market keeps bidding up is usually a puzzle. Here the answer is that the market is not pricing the trailing year. It is pricing what the roofing franchise does across a normal cycle, and, more recently, what a strategic acquirer will pay for it.

Start with roofing, because that is where the economics live. The core products are laminate asphalt shingles, and the 10-K describes the segment plainly: it "manufactures and sells glass mat and specialty veil materials used in building and construction applications" alongside the shingle line, and its demand is "driven by both residential repair and remodeling activity and by new residential construction. Roofing damage from major storms can significantly increase demand in this segment". That storm-linked reroofing stream is the quiet strength of the business. A hailstorm does not wait for the housing cycle to turn. It creates non-discretionary demand for a branded product homeowners rarely choose on price, which is why the segment's sales "do not always follow seasonal home improvement, remodeling and new construction industry patterns". That is a more resilient revenue base than a cyclical building-products label suggests.

The customer base concentrates that strength rather than fragmenting it. The 10-K reports that the largest customer "which is a customer of the Roofing, Insulation and Doors segments, accounted for approximately 16%, 15% and 12% of the Company's consolidated net sales in 2025, 2024 and 2023". Large distribution relationships cut both ways, but for a company selling a branded, spec-driven shingle, deep shelf position with the biggest buyers is a moat, not just a risk line. Insulation reinforces the point: the segment carries "a diverse portfolio of high, mid and low-temperature products with a geographic mix of United States, Canada, Europe" and technical grades that sell on performance rather than price alone.

Then there is the reason the stock is where it is right now. In late June 2026, reports surfaced that Carlisle Companies had made more than one unsolicited offer, a cash-and-stock deal valued well above $10 billion at a significant premium to where Owens Corning had been trading, and the stock climbed roughly 14% on the news. Evercore ISI upgraded the stock on the takeover interest. Carlisle is roughly half Owens Corning's revenue but carries a larger market capitalization, which tells you a specialist buyer sees the roofing and insulation franchises as worth more consolidated than the public market has been paying for them standalone. Even without a completed deal, the approach reprices the floor: it is direct evidence that a strategic acquirer values these assets above the earnings-power methods do. Management has also kept returning capital, committing to about $1 billion of shareholder returns in 2026 through dividends and repurchases, and the multi-year share count has fallen at roughly 5% a year, which is buyback showing up where it cannot be faked.

Bear Case

The valuation methods disagree, and the disagreement is the bear case. Only the peer-multiple lens supports today's price. The asset-value methods, the earnings-power methods, and the growth-DCF methods all read the stock as expensive, several of them by a wide margin. When the conservative approaches cluster below the price and only the relative-multiple approach reaches it, the honest reading is that the price leans on what comparable companies fetch rather than on what this company currently earns or owns. Peer multiples are the most sentiment-driven of the four families. They move with the sector's mood, and right now the sector's mood includes a takeover premium.

The reason the earnings-power methods object is visible in the results. This was not a soft quarter, it was a soft year layered with charges. Segment EBITDA fell "$121 million in our Roofing segment, decreased $97 million in our Insulation segment" in 2025, driven by "lower sales volumes across all three segments". In Doors, volumes fell about 8% and the reporting unit's fair value dropped enough to force a goodwill impairment charge. The first quarter of 2026 extended the pattern: revenue fell about 10.5% year over year and the company posted a net loss, weighed by a pre-tax loss on the glass-reinforcements divestiture, product-recall liabilities, and restructuring costs. Trailing operating income is thin, and the earnings-power methods simply capitalize that thin number. They are not being pessimistic. They are being literal.

Here is the arithmetic the price has to clear. At $128 (July 1, 2026), the market is paying about 23 times company-wide operating income, which requires operating profit to compound at roughly 17% a year for five years. That pace is within what Owens Corning has delivered in good stretches, so the near-term rate is not the stretch. The stretch is duration. Sustaining that compounding for a full five years is something only about 47% of comparable fast-growers managed over a similar span, and this is a cyclical whose demand "trends have likely resulted in reduced levels of repair and remodel as well as new construction activity and demand for our products" when rates stay high and home-improvement projects get deferred. If the recovery is slower or shallower than the price assumes, the multiple compresses back toward what the earnings-power methods already show.

The balance sheet narrows the margin for error. Net debt sits near $5.6 billion against liquid assets of about $272 million, and on the depressed trailing operating income the leverage ratio and interest coverage both look stretched. That is partly an artifact of a trough year, and coverage normalizes as EBITDA recovers toward the guided range. But it means the downside case is not cushioned by a fortress balance sheet. Strip out the Carlisle premium and the bear is straightforward: a leveraged cyclical in a demand trough, priced by the one method family most exposed to the sentiment the takeover approach just inflated.

Valuation

Take today's price and work backward. At $128 the market pays about 23 times company-wide operating income, and that price embeds an assumption: operating profit compounds at roughly 17% a year for five years. Owens Corning has grown that fast in favorable stretches, so the rate itself is within its own range. The demand comes from duration. Holding that pace across a full five years is something only about 47% of comparable fast-growers sustained historically, and the buyer at today's price is underwriting that persistence for a cyclical building-products company.

The methods used to triangulate the business disagree on whether that is a fair bet, and the pattern of the disagreement is the signal. The peer-multiple family reaches the price. The asset-value, earnings-power, and growth-DCF families all land below it, several of them well below. Read plainly, only relative multiples defend $128; everything anchored to what the company currently earns or owns says the stock is expensive. The earnings-power methods object for a concrete reason: trailing operating income is thin after a year in which segment EBITDA fell "$121 million in our Roofing segment, decreased $97 million in our Insulation segment", so capitalizing that trough number produces values below the price. Book value per share sits around $45, which is the floor the asset methods point to, not a target.

The near-term catalyst reconciles the gap the static methods leave open. A mean analyst price target near $140 sits modestly above today's price, and the Carlisle approach values the company well above $10 billion at a premium to the recent trading range. What the street and the strategic buyer credit that the trailing-earnings methods cannot is a normalized cycle plus the scarcity value of the roofing franchise. The trailing lens reads the price as stretched against demonstrated earnings; the forward and acquisition lenses land near or above it because they price a recovery the trough year does not yet show. Those are different measurement bases, and the reader should not divide one into the other.

Solvency bounds the downside and defines the risk. Net debt near $5.6 billion sits against roughly $272 million of liquid assets, and on trailing operating income both leverage and interest coverage look strained, an artifact of the trough that eases as EBITDA recovers toward the guided range. The share count has fallen about 5% a year, direct evidence of buyback deployment. The bet at $128 is that the cycle turns, the roofing engine reprices toward its through-cycle economics, and, in the meantime, a strategic acquirer keeps a floor under the stock that the earnings-power methods do not.

Catalysts

The dominant catalyst is corporate, not operational. In late June 2026, reports emerged that Carlisle Companies had made more than one unsolicited offer for Owens Corning, a cash-and-stock proposal valued above $10 billion at a significant premium to the year's trading range, and the stock jumped roughly 14% intraday on the news. Owens Corning had not engaged substantively as of the reports, leaving Carlisle to weigh its next move, so the situation is live rather than resolved. Evercore ISI upgraded the stock to Outperform on the takeover interest. Until this either advances to a formal bid or lapses, it will drive the stock more than any print.

Underneath the deal speculation, the business is executing a portfolio reshaping. Owens Corning completed the sale of its glass-reinforcements business on April 30, 2026, with expected cash proceeds around $280 million plus $50 million to $70 million from excess alloy sales, and it is divesting company-owned Doors distribution operations and an Oregon components facility. Those exits sharpen the focus on branded residential and commercial building products but also create a revenue headwind in Doors through most of 2026. For the second quarter, management guided revenue from continuing operations of $2.6 billion to $2.7 billion with adjusted EBITDA margins of 20% to 22%, with roofing margins guided to the low 30s and insulation around 20%.

The near-term operating signal to watch is whether volumes stabilize. First-quarter 2026 revenue fell about 10.5% year over year and the company posted a net loss on divestiture, recall, and restructuring charges, so the recovery thesis rests on the guided margin expansion holding and on repair-and-remodel demand firming as the year progresses. Management has affirmed roughly $1 billion of 2026 shareholder returns through dividends and repurchases, though it paused buybacks in the first quarter.

Peer Cohorts (Per Segment, With Filing Citations)

Roofing (reported)

• CRH (CRH public limited company)
• FY2025 10-K: …the use of recycled materials in our paving services, thereby reducing waste, emissions and energy consumption. Together with our Essential Materials businesses, we have developed our roads offering to provide customers with quality, flexibility, speed, expertise and convenience through our deep market knowledge and…
• FY2025 10-K: …source for the supply of these materials and resources, other than in certain jurisdictions with regard to the supply of gas and electricity. CRH also utilizes various external suppliers and service providers throughout its business in addition to its internal supply chains, which enables it to economically source…
• EXP (EAGLE MATERIALS INC.)
• FY2025 10-K: …affected by macroeconomic and other factors beyond our control. For example, the recent rises in inflation and interest rates have negatively affected the construction industry by, among other things, increasing material costs and decreasing demand for some construction products. While we cannot predict the extent to…
• FY2025 10-K: …While continuing higher interest rates have been a headwind for housing demand and affordability, several factors, including the chronic housing shortage caused by more than a decade of underproduction and exacerbated by "rate lock-in" have supported housing construction activity. We believe continued healthy…
• JHX (JAMES HARDIE INDUSTRIES PLC)
• (no filing in the citation store)
• AMRZ (Amrize Ltd)
• FY2025 10-K: …as well as a variety of downstream products and solutions such as ready- mix concrete, asphalt and other construction materials. • Our Building Envelope segment offers advanced roofing and wall systems, including single-ply membranes, insulation, shingles, sheathing, waterproofing and protective coatings, along with…
• FY2025 10-K: …market new construction techniques and technologies, our efforts may be unsuccessful or unprofitable resulting in impairments , which could negatively affect our results of operations and market positions . Components of Results of Operations Revenues We earn revenue from the sale of Building Materials products…

Insulation (reported)

• CRH (CRH public limited company)
• FY2025 10-K: …sector is increased reindustrialization activity across our operating footprint. Large, multi-year construction projects (including data centers, semiconductors, pharmaceutical & auto manufacturing facilities) are underpinned by supportive U.S. government policies including significant pledged investments in areas…
• FY2025 10-K: …Agreement. 97 CRH FORM 10-K 19.1 Insider Trading Policy (incorporated by reference to Exhibit 19.1 to the annual report on Form 10-K filed February 26, 2025). 21.1 Principal Subsidiary Undertakings. 22.1 List of Guarantors and Subsidiary Issuers of Guaranteed Securities. 23.1 Consent of Independent Registered Public…
• EXP (EAGLE MATERIALS INC.)
• FY2025 10-K: …such as in connection with a merger, acquisition, or corporate reorganization, or refinancing. When cement plants become available for purchase, the purchase process is often highly competitive, which tends to result in relatively high valuations for the plants offered for sale. There can be no assurance that we will…
• FY2025 10-K: …and materials-in-progress inventory, we performed audit procedures, assisted by specialists, that included, among others, obtaining inventory measurements performed by third parties, observing management's inspection and measurement of inventory, testing the measurement techniques of the inventory stockpiles, testing…
• JHX (JAMES HARDIE INDUSTRIES PLC)
• (no filing in the citation store)
• AMRZ (Amrize Ltd)
• FY2025 10-K: …as well as a variety of downstream products and solutions such as ready- mix concrete, asphalt and other construction materials. • Our Building Envelope segment offers advanced roofing and wall systems, including single-ply membranes, insulation, shingles, sheathing, waterproofing and protective coatings, along with…
• FY2025 10-K: …market new construction techniques and technologies, our efforts may be unsuccessful or unprofitable resulting in impairments , which could negatively affect our results of operations and market positions . Components of Results of Operations Revenues We earn revenue from the sale of Building Materials products…
• FBIN (Fortune Brands Innovations, Inc.)
• FY2025 10-K: …centers and mass merchandisers. This segment is increasingly investing in and developing digital products and "smart" home capabilities. In aggregate, sales to The Home Depot and Lowe's comprised approximately 21% of net sales of the Water segment in 2025. This segment's chief competitors include Masco, Kohler, LIXIL…
• FY2025 10-K: Segment Raw Materials Water Brass, zinc, resins, stainless steel and aluminum Outdoors Wood, aluminum, steel, plastics, resins, glass, vinyl and insulating foam Security Steel, zinc, brass and resins Intellectual property. Product innovation and branding are important to the success of our business. In addition to the…
• AWI (ARMSTRONG WORLD INDUSTRIES, INC.)
• FY2025 10-K: , based in Albemarle, North Carolina. Insolcorp develops, tests and manufactures energy saving products deployed in building and roofing installations. The acquired operations, assets and liabilities of Insolcorp are included in our Mineral Fiber segment. In July 2023, we acquired all of the issued and outstanding…
• FY2025 10-K: …stock of Geometrik Manufacturing, Inc. ("Geometrik"), based in Kelowna, British Columbia, Canada. Geometrik is a designer and manufacturer of wood acoustical ceiling and wall systems. The operations, assets and liabilities of Geometrik are included in our Architectural Specialties segment. In December 2024, we…

Doors (reported)

• FBIN (Fortune Brands Innovations, Inc.)
• FY2025 10-K: …faucets, accessories, luxury hardware, kitchen sinks and waste disposals, predominantly under the Moen, ROHL, Riobel, Victoria+Albert, Perrin & Rowe, Aqualisa, Shaws, Emtek, Schaub and SpringWell brands. The Outdoors segment includes fiberglass and steel entry door systems under the Therma-Tru brand name, storm,…
• FY2025 10-K: …distributed primarily under the Master Lock, American Lock, Yale and August brands and fire resistant safes, security containers and commercial cabinets manufactured, sourced and distributed under the SentrySafe brand. This segment sells products principally in the U.S., Canada, Europe, Central America, Japan and…
• AWI (ARMSTRONG WORLD INDUSTRIES, INC.)
• FY2025 10-K: $ 15.2 million of additional cash consideration for the acquisition of Turf Design, Inc., which represented the final achievement of certain financial and performance milestones through December 31, 2022. NOTE 19. DERIVATIVE FINANCIAL INSTRUMENTS We are exposed to market risk from changes in foreign exchange rates,…
• FY2025 10-K: …of Business Conduct, the "Codes of Ethics") that applies to all professionals in our finance and accounting functions worldwide, including our Chief Financial Officer and our Controller. The Codes of Ethics are intended to deter wrongdoing and to promote: • honest and ethical conduct, including the ethical handling…
• SKY (Champion Homes, Inc.)
• FY2025 10-K: …gives us the ability to adapt as consumer preferences change or demand in certain markets change. We regularly introduce homes with new floor plans, exterior designs and elevations, decors and features. Our corporate architecture, marketing, and engineering departments work with our manufacturing facilities to design…
• FY2025 10-K: …Champion Corporation for periods ending on or before the name change and to Champion Homes, Inc. for any references to the Company after the name change. PART I Cautionary Statement About Forward-Looking Statements Some of the statements in this Annual Report on Form 10-K (this "Annual Report") that are not…
• CVCO (Cavco Industries, Inc.)
• FY2025 10-K: …to the purchaser's specifications. The buildings are transported to the customer's site in the same manner as residential homes and are often set by crane and finished at the site. We produce residential homes in a variety of floor plans. Most of these homes are single-story and generally range in size from…
• FY2025 10-K: …including the ability to generate positive cash flow from operations, may be significantly hindered. Factors that could affect our results and cause them to materially differ from those contained in the forward-looking statements include, without limitation, those discussed under Item 1A, "Risk Factors," and…
• JHX (JAMES HARDIE INDUSTRIES PLC)
• (no filing in the citation store)
• AMRZ (Amrize Ltd)
• FY2025 10-K: $3,381 million (after deductions of fees, discounts and commissions payable to the initial purchasers and expenses of the offering payable by us). The net proceeds were transferred to Amrize North America Inc., the parent of FinanceCo, to repay certain outstanding intercompany loans owed to subsidiaries of Holcim that…
• FY2025 10-K: AmrizeFinanceUSLLCMember us-gaap:SeniorNotesMember 2025-04-07 0002035989 holcim:A4.60UnsecuredNotesMember holcim:AmrizeFinanceUSLLCMember us-gaap:SeniorNotesMember 2025-04-07 2025-04-07 0002035989 holcim:A4.70UnsecuredNotesMember holcim:AmrizeFinanceUSLLCMember us-gaap:SeniorNotesMember 2025-04-07 0002035989…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.