Owens Corning Stock After Divestiture: A Leaner, Stronger Play?

Owens Corning OC has announced the sale of its glass reinforcements business to India-based Praana Group for $755 million. This transaction marks the completion of Owens Corning’s strategic review and reinforces its focus on residential and commercial building products in North America and Europe.The divestiture is a strategic step that will streamline Owens Corning’s portfolio, making it a more capital-efficient leader in the building products industry. The move also allows the company to reallocate resources to segments with stronger growth potential.Shares of OC have gained 0.8% during the trading session and 0.3% in the after-hour trading session last Friday.A Win for Both CompaniesThe glass reinforcements business, part of Owens Corning’s Composites segment, generated approximately $1.1 billion in revenues in 2024 and spans 18 operations across 12 countries. This segment has long served industries such as wind energy, transportation, and infrastructure. With the sale, Praana Group gains a global footprint in advanced materials, reinforcing its expertise in composites for the industrial sector.Brian Chambers, Owens Corning’s chair and CEO, emphasized that the deal supports the company’s strategic plan, delivering maximum value to shareholders while allowing the company to focus on high-growth, capital-efficient businesses.A More Focused Owens CorningPost-sale, Owens Corning will retain key assets within its Composites segment, including its glass nonwovens and structural lumber businesses. These will be integrated into its Roofing and Insulation segments, further aligning operations with its core strengths. The divestiture is expected to improve operational efficiency, drive profitability, and enhance cash generation, positioning the company for long-term growth.Growth Opportunities for Praana GroupThis acquisition strengthens Praana Group's position in the competitive glass reinforcements market, broadening its operations and geographical presence. With rising global demand for sustainable materials and clean energy solutions, Praana is well-positioned to capitalize on industry trends and drive innovation in composites manufacturing.What’s Next for Owens Corning?The transaction, which marks the completion of Owens Corning’s strategic review of the business, is expected to close in 2025, subject to regulatory approvals. With this divestiture, Owens Corning is poised for greater focus and financial flexibility, ensuring sustained growth in the building products sector.OC Stock Price PerformanceShares of this provider of building materials systems and composite solutions have gained 10.3% in the past six months, outperforming the Zacks Building Products - Miscellaneous industry’s 5% growth. The company’s performance is most likely backed by its strategic focus on high-margin products, improvement in operational efficiencies and divestment of low-margin and capital-intensive businesses. Furthermore, the balanced capital allocation strategy bodes well, as its incremental trajectory has been boosting investors’ sentiments for a long time now. Image Source: Zacks Investment ResearchFurthermore, the Zacks Consensus Estimate for Owens Corning’s 2025 earnings per share (EPS) has increased over the past 30 days to $15.85 from $15.76, indicating 2.3% year-over-year growth.The company’s trailing 12-month return on equity (ROE) is indicative of its growth potential and focus on maintaining shareholder value. Its ROE of 25.8% compares favorably with the industry’s 14.8%, indicating more efficiency in using shareholders’ funds than peers.OC’s Zacks Rank & Other Key PicksOwens Corning currently carries a Zacks Rank #2 (Buy).Here are some other top-ranked stocks from the Construction sector.Frontdoor, Inc. FTDR currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.FTDR delivered a trailing four-quarter earnings surprise of 269%, on average. The stock has gained 27.3% in the past six months. The Zacks Consensus Estimate for FTDR’s 2025 sales and EPS indicates an increase of 6.4% and 1.4%, respectively, from a year ago.Dycom Industries, Inc. DY currently carries a Zacks Rank #2. DY delivered a trailing four-quarter earnings surprise of 16.6%, on average. The stock has lost 8.4% in the past six months.The Zacks Consensus Estimate for DY’s fiscal 2026 sales and EPS indicates an increase of 14% and 14.3%, respectively, from a year ago.Armstrong World Industries AWI currently carries a Zacks Rank #2. MTZ delivered a trailing four-quarter earnings surprise of 10.5%, on average. The stock has gained 25.6% in the past six months.The Zacks Consensus Estimate for AWI’s 2025 sales and EPS indicates an increase of 6.1% and 11.2%, respectively, from a year ago.Just Released: Zacks Top 10 Stocks for 2025Hurry – you can still get in early on our 10 top tickers for 2025. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2025. You can still be among the first to see these just-released stocks with enormous potential. See New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Armstrong World Industries, Inc. (AWI): Free Stock Analysis Report Dycom Industries, Inc. (DY): Free Stock Analysis Report Owens Corning Inc (OC): Free Stock Analysis Report Frontdoor Inc. (FTDR): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks