O-I Glass: Launching Coverage With Narrow Moat and $30 Fair Value Estimate; Shares Look Attractive

We are reinitiating coverage on O-I Glass with a fair value estimate of $30 per share. We assign the firm a narrow moat rating, and we believe the company primarily benefits from efficient scale and intangible asset moat sources. This is an upgrade from our prior rating as O-I resolved its asbestos liabilities in 2022 that previously raised concerns of material equity value destruction. O-I is one of the largest producers of glass containers in the world, mainly serving beverage end markets. The glass-container market is highly concentrated as most regions are typically serviced by a few large competitors that maintain long-standing customer relationships. The low value of glass containers combined with its significant weight limits transportation distances, which creates localized markets where producers possess strong pricing power.