O-I Glass Earnings: Normalizing Glass Container Demand Weighs on Volumes, but Shares Remain Cheap

Narrow-moat-rated O-I Glass reported second-quarter results that were in line with our expectations. Like many other packaging companies, O-I’s quarter was negatively affected by customer destocking and normalizing consumer demand. Nevertheless, O-I reported a 6% increase in revenue year over year, as a 9% decline in volume was more than offset by a 13% increase in selling prices. Even with its robust pricing gains, O-I faces a challenging second half of the year amid inventory-management initiatives and constrained beverage demand. As such, we've decreased our fair value estimate to $28 per share from $30 due to lower near-term profitability in our forecast.