OC heads into its August 5 earnings report with options traders making the most bullish bet on the stock in nearly a year.
The shift in options positioning is the defining feature of the setup. The put/call ratio collapsed to 0.66 on July 31 — more than two standard deviations below its 20-day average of 1.05, and the lowest reading since at least last summer. That's a sharp reversal: for most of July, the PCR ran above 1.2, suggesting heavy demand for downside protection. The pivot to calls arrived just as short sellers were simultaneously retreating. Short interest fell 21% over the past week to 4% of the free float, unwinding a position that had been building since late June. Borrow conditions confirm there's no tension in the lending market — availability is extremely loose at 1,469%, meaning there are roughly fifteen shares available to borrow for every one currently shorted, and borrowing costs are negligible at under 0.4%.
The analyst community has been consistently raising its conviction on Owens Corning through July. Evercore ISI upgraded the stock to Outperform on June 30, lifting its target to $188, and followed up just this week with another raise to $193. Barclays moved its target from $144 to $170, Wells Fargo pushed from $150 to $165, and Goldman Sachs revised up to $159 — all within the past three weeks. The consensus mean target of $164.57 implies roughly 18% upside from the current price near $139. The bull case centers on portfolio mix improvements, strong free cash flow generation, and a Q2 sales guidance range of $2.67–$2.72 billion that would represent meaningful year-on-year growth. Bears point to an 8% projected EPS decline for FY2025, weakening insulation pricing, and volume pressure in the Insulation and Doors segments from a rate-constrained housing market. The stock has lost 13% over the past month — peers and are both down roughly 10% and 9% on the week respectively, suggesting sector-wide pressure rather than a company-specific de-rating.
The short score has eased materially, dropping from 45.6 on July 20 to 37.8 by month-end, reinforcing the picture of short sellers covering rather than pressing. On valuation, OC trades at roughly 12.8x trailing earnings and 8.1x EV/EBITDA — undemanding multiples for the sector, which partly explains why the EV/EBIT factor ranks in the 76th percentile against its universe. Insider activity has been limited to modest executive sells, none at a scale that changes the directional read. Overall, positioning looks meaningfully more constructive than it did even two weeks ago — options buyers are reaching for calls, shorts are retreating, and the Street has been ratcheting targets higher into the print.
Wednesday's report will test whether Q2 results and management's volume outlook for the second half justify the sudden shift in options sentiment and the wall of upward analyst revisions.
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