O-I Glass cut at BofA, seeing weak demand for glass-packaged alcohol products (NYSE:OI)
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O-I Glass (NYSE:OI) -5.7% in Friday’s trading after Bank of America downgraded to Neutral from Buy with a $16 price target, cut from $21, saying it will be difficult for the stock to re-rate until growth improves.
BofA’s Bryan Spillane believes demand for glass-packaged, alcoholic products could remain sluggish well into this year’s H2, as consumers are shifting to pre-packaged cocktails and cheaper spirits, which are more likely to be packaged in cans or plastic.
Spillane says scanner data suggests weak trends: By category, EQ unit volumes for glass were down ~4% in wine, 1.5% in spirits and 5.5% in beer for the latest 13-week data.
Among can companies, BofA sees estimates as comparatively stable vs. other sectors and taps Buy-rated Crown Holdings (CCK) as one of the bank’s top ideas on valuation, pessimistic investor positioning and the potential for strategic action.
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