O-I Glass Posts Underwhelming Results in Light of Strong Can-Maker Results

Although O-I Glass' results were satisfactory, they stood in stark contrast to those of its peers that manufacture aluminum beverage cans. People spent more time at home in the fourth quarter, requiring more food and beverage packaging than ever before. While can manufacturers have posted low-double-digit volume growth, O-I managed far more modest volume growth. Volumes were up just 2% in the Americas and down about 2.4% in Europe. To us, this suggests either relatively worse execution or favorable ESG tailwinds for aluminum. However, we still expect a rebound in 2021 results as on-premise drinking returns. We've modestly lowered our near-term profit forecasts for O-I, leading us to reduce our fair value estimate to $11.50 per share from $12. Our no-moat rating is unchanged. With shares trading only slightly above our fair value estimate, they look fairly valued at this time.