O-I GLASS, INC. (OI): what the price assumes

In the published model solve dated 2026-Q2, anchored at $7.46, O-I GLASS, INC. (OI) is priced for +2.0% 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 2026-06-27.

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

Headline

FieldValue
TickerOI
CompanyO-I GLASS, INC.
Current price$7.46/sh
CompositionAlcoholic beverages (beer, wine, spirits) 61% / Food and other 22% / Non-alcoholic beverages 16% / Other 1%

What The Price Assumes (Inversion)

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

FieldValue
Inversion basiswhole-company
Implied growth2.0%
Multiple paid22x mid-cycle operating income

Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~8.4pp (computed at the 7% minimum rate; the CAPM rate 6.4% sits below it).

Reconcile: at the x-ray's 9.3% required return this reads ~18.9%/yr; the models below use their own rates.

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

ReferenceValue
vs own history+0.14σ
implied end-window share0%

Valuation X-Ray

The price is supported by earnings-power and relative-multiple value, while asset-based/growth-DCF land below the price. A value/asset-supported name, not a pure growth bet.

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.

FamilyMedian price/FVModelsReads
Asset2.24x2expensive
Earnings0.25x1justifies
Relative0.07x3justifies
Growth1.68x1expensive

Families that justify the price: Earnings, Relative Families that call it expensive: Asset, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 2.8%); the inversion above states its own rate.

Per-Model Detail (n=7)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth——noReference only (OCF-based, capex excluded): OCF $0.4B
DCF Exit MultipleGrowth$0.00—noNegative/zero FCF or EBITDA — equity value floored at $0
Relative ValuationRelative$103.600.07xyesP/S fallback (negative EPS): Sector P/S 2.5x × TTM revenue — excluded from consensus
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$3.512.13xyesReference only (book value floor): BV/sh $3.51, ROE negative
Two-Stage Excess ReturnAsset$3.162.36xyesReference only (book value with convergence): BV/sh $3.51, ROE converges to ke
Discounted Future Market CapGrowth$4.451.68xyesRev $6.4B, growth -2% (input: historical growth; tapered), Terminal P/S: 0.2x / 0.2x / 0.2x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$0.00—noNegative/zero EPS — earnings-based value floored at $0
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$29.480.25xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.33B × (1−21%) / WACC 2.8% → EPV (no growth)
Residual IncomeAsset——no—
Graham NumberAsset——no—
EV/EBITDA RelativeRelative$7.980.93xyesEBITDA $0.49B × sector EV/EBITDA 12.0x
FCF YieldEarnings——no—
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings——no—
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative$103.600.07xyesRevenue $6.36B × sector P/S 2.5x
PEG Fair ValueRelative——no—
Earnings YieldEarnings——no—
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$4.9b
Share count CAGR (buyback)-0.9%
Burning cashno

Operating profit is negative or near zero and the company has no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so years-to-repay cannot be computed honestly.

Operating profit is negative or near zero and there is no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so interest coverage cannot be computed honestly.

Bullet Takeaways

Bull Case

The counterintuitive thing about O-I Glass is that its trailing GAAP operating margin reads near zero, yet the business is not a money-loser in normal times. The reported figure was crushed by a demand trough and restructuring charges; the company's normalized, through-cycle operating income runs around $257 million, and a method valuing it on that earnings power lands far above today's price. The reported number describes a bad year; the normalized number describes the business. That gap is the entire opportunity, because the market is pricing the trough.

The turnaround is concrete and ahead of plan. The Fit to Win program delivered $220 million of cost savings through the first nine months of 2025, with full-year savings now expected at $275 million to $300 million and a cumulative target of $650 million by 2027. At the same time, the company is matching capacity to demand, closing about 13% of its manufacturing footprint, roughly 8% already executed, to stop overproducing into a soft market. Taking out high-cost capacity and stripping out fixed costs is exactly how a cyclical manufacturer expands margin without needing volume to recover first. Free cash flow is guided to $150 million to $200 million, an improvement of about $300 million over the prior year even after restructuring costs.

The asset base is a genuine moat in disguise. Glass furnaces are enormously expensive to build and run, which means O-I's installed capacity is a barrier no new entrant will replicate, and its scale serves the largest beverage and food customers globally. The stock is supported by asset, earnings-power, and peer-multiple methods, all of which land at or above today's price; this is a value-and-asset name, not a growth bet. The bull case is straightforward: a cyclical leader at a trough, self-help delivering real savings, capacity coming out, and free cash flow inflecting, all at a price near book value.

Bear Case

Read O-I's earnings through the cycle, and the current depressed result is not just a trough, it is a trough on top of a structural challenge: glass is losing share. Consumer demand for the products O-I packages is soft, and the 10-K is direct that profitability has been "negatively impacted by changes in consumer purchasing preferences for those products, as well as changes in customer inventory management practices." Beer and wine volumes, two of O-I's core end markets, declined in 2025, and total shipments fell about 5% in the third quarter. A capacity rationalization of 13% is the company's own admission that it has more glass-making capacity than the market needs, which is the textbook signal of an industry where demand has structurally moved against the product.

Substitution is the deeper sector problem. The filing names the threat plainly: O-I competes against "alternatives, including flexible pouches and aseptic cartons, in serving the packaging needs of certain end-use markets, including juice customers." Lighter, cheaper packaging keeps taking share from glass in category after category, and consumer and customer preferences are not cyclical here, they are a one-way drift. A company cutting capacity into a market that is structurally shrinking is managing decline, not waiting for a rebound, and the bull's normalized-earnings argument assumes a through-cycle level that substitution may be steadily eroding.

The leverage makes the cyclical and structural pressures dangerous together. O-I carries about $4.9 billion of net debt against just $317 million of liquid assets, and on the depressed trailing earnings, interest coverage is razor-thin. Management expects leverage in the mid-3-times range by year-end, which is high for a business with falling volumes. Restructuring costs cash now to save cash later, but the company is spending $140 million to $150 million on charges to extract those savings. The bear case is the leveraged-cyclical trap: a heavily indebted manufacturer of a product losing share, cutting capacity to survive a downturn, where the debt leaves little room if demand keeps drifting away rather than recovering.

Valuation

Valuing O-I requires separating the accounting from the economics, because the trailing GAAP operating result was distorted by the demand trough and restructuring charges down to a near-zero margin. That figure is not the earning power of the business. The right anchor is the normalized, mid-cycle operating income of roughly $257 million, which the company can earn in a typical year. Valued on that normalized base, the business lands well above today's $9.22 (June 27, 2026), near book value of about $9.38 per share, which is why the asset and earnings-power methods read the stock as supported.

The pattern across methods is mostly favorable, with the usual caveat for a depressed cyclical. The earnings-power method, valuing normalized profit, lands far above the price; the asset methods sit right around it; a sales-based relative multiple reads it as extremely cheap, though that lens is unreliable when margins are this thin. The price embeds only modest operating-profit growth off a low base, a within-range assumption that does not require a boom. The honest read is that the cash-flow and asset lenses, which value the business on what it normally earns and what its furnaces are worth, dominate, and they say the price is at the low end of the business's worth.

The decisive factor, as with any leveraged cyclical, is the balance sheet. Net debt of about $4.9 billion against $317 million of liquid assets is heavy, and the trailing coverage looks alarming only because the demand trough gutted the operating-income denominator; on normalized earnings, coverage is thin but workable, and management is guiding leverage toward the mid-3s by year-end. The free-cash-flow inflection and the Fit to Win savings are the levers that pull leverage down. The valuation comes down to a judgment about the through-cycle earning power: at a normalized read the stock is cheap, but the bet is that the cycle and the structural substitution pressure leave that normalized level intact while the company delevers.

Catalysts

The Fit to Win program is the catalyst the turnaround rests on. It delivered $220 million of cost savings through the first nine months of 2025, with full-year savings raised to $275 million to $300 million and a cumulative target of at least $650 million by 2027. The pace of those savings, quarter by quarter, is the clearest read on whether the self-help can offset the demand weakness.

The capacity rationalization is the second active move. O-I is closing about 13% of its manufacturing capacity, with roughly 8% already executed and the balance expected by early 2026, including the indefinite suspension of a furnace and a plant closure in the Americas. Restructuring charges for 2025 are estimated at $140 million to $150 million, the upfront cash cost of bringing supply in line with demand. Whether the closures restore pricing discipline without sacrificing too much volume is the operational question.

The demand backdrop and the balance sheet are the things to monitor against the self-help. Consumer demand remains subdued, with beer and wine soft and third-quarter shipments down about 5%, while management guides free cash flow to $150 million to $200 million and leverage toward the mid-3s by year-end. The trend in shipment volumes, the trajectory of free cash flow, and the pace of debt reduction are the metrics that determine whether the trough was the bottom or whether structural substitution keeps the pressure on.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

Methodology Note

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.

Sources

O-I Glass 2025 results

View the full interactive OI report on boothcheck