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O-I Glass (OI) Stock Rallies 21% Year to Date: Here's Why
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O-I Glass, Inc.’s (OI - Free Report) shares have gained 20.8% so far this year, against the industry’s decline of 11.6%. Meanwhile, the Industrial Products sector and the Zacks S&P 500 composite have lost 25.8% and 23.2%, respectively, in the same time frame. OI has a market capitalization of $2.3 billion. The average volume of shares traded in the last three months was 1.15 million.
Better-than-expected Q1 results followed by an upbeat outlook for the second quarter of 2022, backed by higher shipments and solid progress on its ongoing Portfolio Optimization program that is focused on exiting non-core operations and investing in its core business, have contributed to the company’s price performance so far this year.
The Zacks Consensus Estimate for 2022 and 2023 has moved north by 8% and 2%, respectively, in the past 60 days, reflecting analysts’ optimism.
OI currently has a Zacks Rank #2 (Buy) and a VGM Score of A. This helps in identifying stocks with the most attractive value, growth and momentum.
Image Source: Zacks Investment Research
What’s Driving the Stock?
Earlier this month, O-I Glass provided a business update for second-quarter 2022. The company now expects adjusted earnings per share (EPS) for the second quarter to exceed 65 cents per share. This is higher than the company’s prior guidance of 55-60 cents per share for the quarter, indicating improved glass container shipments witnessed through the ongoing quarter. O-I Glass had reported a surge of 60% in adjusted earnings per share in the first quarter of 2022, driven by gains from higher sales volumes and production, favorable pricing, and benefits from its ongoing margin expansion initiatives. OI has surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 18.9%.
O-I Glass continues to expect current-year adjusted EPS between $1.85 and $2.10. The mid-point of the guidance indicates growth of 8% from the adjusted EPS of $1.83 in 2021. Earnings will benefit from higher sales volume and continued strong demand for healthy and sustainable glass containers. Higher selling prices are likely to negate the impact of cost inflation.
The company recently announced that its subsidiary completed a sale and leaseback transaction for a plant located in Brampton, Ontario, for CAD $244 million ($191 million). With this deal, the company has already generated $1.3 billion of proceeds under its ongoing Portfolio Optimization program to exit non-core operations and invest in its core business. It is set to achieve its targeted $1.5 billion by the end of this year — way ahead of its original target of 2024. Proceeds from the program will be utilized to fund expansion projects and improve financial strength.
The company is well-poised to gain from the growing demand for glass on consumer preference for healthy, premium and sustainable products for food and beverage. It is thus investing in incremental capacity, joint ventures and acquisitions in emerging geographies to capitalize on this trend. The company has plans in place to invest up to $680 million in new capacity through 2024 to achieve volume growth and meet demand. These investments are anticipated to generate an average internal rate of return of 20%. Its margin expansion initiative is likely to generate annual benefits of $50 million from 2022 to 2024.
O-I Glass is driving innovation. Its glass melting technology, known as the MAGMA program, intends to reduce the amount of capital required to install, rebuild and operate the company’s furnaces. Its full-scale commercial MAGMA Gen 1 production line is operational, and the company achieved critical milestones in 2021. This new technology is focused on the ability of these assets to be more easily turned on and off or adjusted based on seasonality and customer demand. It has completed the pilot validation for the Generation two MAGMA line in Streator, IL. The company continues to make solid progress in developing Generation three. O-I Glass expects to complete the multi-generation MAGMA development plan over the next few years.
Other Stocks to Consider
Some other top-ranked stocks in the Industrial Products sector are Titan International , Myers Industries (MYE - Free Report) and Packaging Corporation of America (PKG - Free Report) . While TWI and MYE sport a Zacks Rank #1 (Strong Buy) at present, PKG carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Titan International has an estimated earnings growth rate of 112% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 55%.
Titan International pulled off a trailing four-quarter earnings surprise of 56.4%, on average. The company’s shares have soared 60% so far this year.
Myers Industries has an expected earnings growth rate of 67% for 2022. The Zacks Consensus Estimate for the current year’s earnings has moved up 27% in the past 60 days.
MYE has a trailing four-quarter earnings surprise of 20.1%, on average. Myers Industries’ shares have risen 10% year-to-date.
Packaging Corporation has an expected earnings growth rate of 16.2% for 2022. The Zacks Consensus Estimate for the current year’s earnings rose 4.2% in the past 60 days.
PKG has a trailing four-quarter earnings surprise of 19.6%, on average. So far this year, Packaging Corporation’s shares have risen 2.6%.
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O-I Glass (OI) Stock Rallies 21% Year to Date: Here's Why
O-I Glass, Inc.’s (OI - Free Report) shares have gained 20.8% so far this year, against the industry’s decline of 11.6%. Meanwhile, the Industrial Products sector and the Zacks S&P 500 composite have lost 25.8% and 23.2%, respectively, in the same time frame. OI has a market capitalization of $2.3 billion. The average volume of shares traded in the last three months was 1.15 million.
Better-than-expected Q1 results followed by an upbeat outlook for the second quarter of 2022, backed by higher shipments and solid progress on its ongoing Portfolio Optimization program that is focused on exiting non-core operations and investing in its core business, have contributed to the company’s price performance so far this year.
The Zacks Consensus Estimate for 2022 and 2023 has moved north by 8% and 2%, respectively, in the past 60 days, reflecting analysts’ optimism.
OI currently has a Zacks Rank #2 (Buy) and a VGM Score of A. This helps in identifying stocks with the most attractive value, growth and momentum.
Image Source: Zacks Investment Research
What’s Driving the Stock?
Earlier this month, O-I Glass provided a business update for second-quarter 2022. The company now expects adjusted earnings per share (EPS) for the second quarter to exceed 65 cents per share. This is higher than the company’s prior guidance of 55-60 cents per share for the quarter, indicating improved glass container shipments witnessed through the ongoing quarter. O-I Glass had reported a surge of 60% in adjusted earnings per share in the first quarter of 2022, driven by gains from higher sales volumes and production, favorable pricing, and benefits from its ongoing margin expansion initiatives. OI has surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 18.9%.
O-I Glass continues to expect current-year adjusted EPS between $1.85 and $2.10. The mid-point of the guidance indicates growth of 8% from the adjusted EPS of $1.83 in 2021. Earnings will benefit from higher sales volume and continued strong demand for healthy and sustainable glass containers. Higher selling prices are likely to negate the impact of cost inflation.
The company recently announced that its subsidiary completed a sale and leaseback transaction for a plant located in Brampton, Ontario, for CAD $244 million ($191 million). With this deal, the company has already generated $1.3 billion of proceeds under its ongoing Portfolio Optimization program to exit non-core operations and invest in its core business. It is set to achieve its targeted $1.5 billion by the end of this year — way ahead of its original target of 2024. Proceeds from the program will be utilized to fund expansion projects and improve financial strength.
The company is well-poised to gain from the growing demand for glass on consumer preference for healthy, premium and sustainable products for food and beverage. It is thus investing in incremental capacity, joint ventures and acquisitions in emerging geographies to capitalize on this trend. The company has plans in place to invest up to $680 million in new capacity through 2024 to achieve volume growth and meet demand. These investments are anticipated to generate an average internal rate of return of 20%. Its margin expansion initiative is likely to generate annual benefits of $50 million from 2022 to 2024.
O-I Glass is driving innovation. Its glass melting technology, known as the MAGMA program, intends to reduce the amount of capital required to install, rebuild and operate the company’s furnaces. Its full-scale commercial MAGMA Gen 1 production line is operational, and the company achieved critical milestones in 2021. This new technology is focused on the ability of these assets to be more easily turned on and off or adjusted based on seasonality and customer demand. It has completed the pilot validation for the Generation two MAGMA line in Streator, IL. The company continues to make solid progress in developing Generation three. O-I Glass expects to complete the multi-generation MAGMA development plan over the next few years.
Other Stocks to Consider
Some other top-ranked stocks in the Industrial Products sector are Titan International , Myers Industries (MYE - Free Report) and Packaging Corporation of America (PKG - Free Report) . While TWI and MYE sport a Zacks Rank #1 (Strong Buy) at present, PKG carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Titan International has an estimated earnings growth rate of 112% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 55%.
Titan International pulled off a trailing four-quarter earnings surprise of 56.4%, on average. The company’s shares have soared 60% so far this year.
Myers Industries has an expected earnings growth rate of 67% for 2022. The Zacks Consensus Estimate for the current year’s earnings has moved up 27% in the past 60 days.
MYE has a trailing four-quarter earnings surprise of 20.1%, on average. Myers Industries’ shares have risen 10% year-to-date.
Packaging Corporation has an expected earnings growth rate of 16.2% for 2022. The Zacks Consensus Estimate for the current year’s earnings rose 4.2% in the past 60 days.
PKG has a trailing four-quarter earnings surprise of 19.6%, on average. So far this year, Packaging Corporation’s shares have risen 2.6%.