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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 fuel provides are shut down.
Barclays analyst Michael Leithead praised firm administration for sturdy worth/value 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 subsequent 12 months.
Glass-making operations require a major 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 fuel provide to Europe is curtailed or shut off, and various choices to pure fuel might result in increased 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 high choose in commodity chemical compounds, citing additional margin enlargement and the corporate’s balanced capital deployment technique, and upgrades Factor Options (ESI) to Obese 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) just lately raised steerage for Q2 adjusted EPS to exceed $0.65 vs. its prior anticipated vary of $0.55–$0.60.
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