OI
Brought OI At $11.64 near the close today. here is what I like.
1) OI is a turnaround story, which last quarter raised 2025 annual guidance to $1.30-1.55, I expect them to be near the high end if not slightly exceed these results.
2) What is very exciting about OI is there cost savings plan over the 2025-2027 period, they have projected to cut 650 million in annual expenses over those 3 years. In fact they guided for 250 million in cuts in 2025 or year 1, they have already successfully cut 145 million. This is going to drastically improve both cash flows and earnings over the coming years as I expect earning to jump significantly over the next 3-5 year because of this, so I think we are in the early innings here because of this.
3) OI has guided for Adjusted Ebitda of at least 1,450 Million by 2027 and by 2029 of at least 1,650 million. this is gonna drastically improve cash flows and earnings. I think $2.00 or so is very possible next year. Given at least a 10x multiple I feel FV is $20 over the next 6-12 months. To be fair analyst estimates are for $1.89 next FY over $1.47 this year, so they kind of for the most part see the direction eps is going here over the coming years which is substantially higher.
Conclusion: I like OI a lot here, I think we will see substantial earnings growth over the coming years, which will lead to improved FCF, and I think this will lead to much higher prices of OI over the 6-12 months. Time will tell. All is just my opinion, and I could always be wrong though.
AI
