Goldman Reduces Estimates and Price Target For OC

Goldman Sachs has recently reduced estimates and the price target for Owens Corning OC, citing a tough roofing market. Owens Corning lowered its 2010 demand expectation for roofing shingles to -10% YoY from flat, resulting from customer inventory reductions, has slowed the business. OC no longer expects to achieve as much as $450 in adjusted EBIT in 2010. Goldman is lowering 3Q2010 estimates to $0.35 from $0.68 as the volume decline and resultant margin weakness is likely to drive a material reduction from the previous EBIT projections. Goldman also lowers its target price to $31 from $35. Key downside risks include slower industrial production and further weakness in roofing. An upside risk is further pricing strength. Owens Corning closed Monday at $23.71