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O-I Glass (NYSE:OI) -9.9% to a four-month low in Monday’s buying and selling after shares have been downgraded to Underweight from Equal Weight with a $13 worth goal, trimmed from $15, at Barclays on manufacturing dangers in Europe if Russian gasoline provides are shut down.
Barclays analyst Michael Leithead praised firm administration for robust worth/price execution lately, however he stated the present “macro backdrop and elevated capital spending by means of 2024 presents an elevated quantity of challenges/dangers to the O-I fairness story” over the following yr.
Glass-making operations require a big and steady quantity of vitality to run, and with Europe comprising greater than 40% of O-I’s (OI) revenues, Leithead thinks the corporate faces manufacturing dangers if the pure gasoline provide to Europe is curtailed or shut off, and various choices to pure gasoline may result in greater prices and margin compressions.
The analyst additionally is worried about slowing demand, “each from destructive elasticity to rising glass bottle prices, in addition to a weakening European financial system.”
Barclays sees Linde (LIN) as its prime choose in commodity chemical compounds, citing additional margin growth and the corporate’s balanced capital deployment technique, and upgrades Component Options (ESI) to Chubby from Equal Weight with a $22 PT, saying the inventory’s YTD underperformance is disconnected from the medium-term “attractiveness” of the corporate’s end-markets.
O-I Glass (OI) not too long ago raised steering for Q2 adjusted EPS to exceed $0.65 vs. its prior anticipated vary of $0.55–$0.60.
