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Owens Corning (NYSE:OC) and TopBuild (NYSE:BLD) are likely to report higher earnings than previously forecast, according to analysts at Bank of America Securities. They said Friday they were raising their EPS forecast for the building products company due to gains in new home construction.
“We expect the acceleration of housing construction by home builders to drive increases in the Owens Corning (OC) insulation segment and TopBuild (BLD) housing business through 2H23 to 2024,” Rafe Jadrosich, analyst at BofA, said in a July 14 report. “A check of our channels and comments from public housing builders indicate the shift in single-family housing construction started in 2Q23 will continue into 2H23 due to continued strength in demand for new homes.”
With earnings season starting, BofA maintains Buy ratings on Owens Corning (OC) and TopBuild (BLD).
BofA raised its price target for Owens Corning (OC) to $152 per share from $127 per share previously, based on the company’s value-to-EBITDA multiple of 7.4 times, up from 7 times, its estimated EBITDA for 2024.
The bank also raised its price target for TopBuild (BLD) to $305 per share from $255 per share previously, based on the company’s value-to-EBITDA multiple of 10.5 times, up from the 9.5 times estimated EBITDA for 2024.
Change in estimate Bank of America Securities, July 15 Owens Corning (OC) Old Consensus EPS New CY 2023E $11.78 $10.01 $10.93 CY 2024E $12.52 $11.03 $11.59 TopBuild (BLD) Old Consensus EPS New CY 2023E $17.28 $16.62 $16.28 CY 20 24E $18.85 $17.81 $17.13