Upgrade from Wells Fargo#
Wells Fargo has upgraded O-I Glass Inc. (NYSE: OI) from an Equal Weight rating to Overweight. This change comes with a price target of $13.00 per share. The upgrade follows a disappointing first quarter for the company, which saw its shares drop by 11% in one week, contrasting with a 1% decline in the broader materials sector index.
Current Stock Performance#
Currently, O-I Glass shares are trading at $9.49, close to their 52-week low of $8. The stock has decreased by 36% year-to-date, marking a significant decline outside of the COVID-19 pandemic period. Wells Fargo believes that the stock is undervalued, trading at 4.4 times its estimated earnings before interest, taxes, depreciation, and amortization (EBITDA) for 2027, which is about 10% lower than the company's own guidance.
Financial Estimates and Projections#
Wells Fargo has set its price target based on a valuation of 5.4 times the estimated EBITDA for 2026, adjusting its projections to $1.15 billion for 2026 and $1.31 billion for 2027. The firm anticipates a 14% year-over-year growth in EBITDA for 2027. Additionally, the company's Fit-to-Win initiative is expected to contribute $275 million to EBITDA in 2026 and another $150 million in 2027.
Recent Earnings Report#
In its recent first-quarter earnings report, O-I Glass reported an adjusted earnings per share (EPS) of $0.05, which fell short of the expected $0.16 by 68.75%. However, the company did achieve revenue of $1.54 billion, slightly above the forecast of $1.48 billion. Despite this revenue beat, the significant EPS miss has raised concerns among investors and analysts, prompting discussions about the company's financial health and future strategies.