O-I Glass Earnings: Bottled-Up Demand Creates Near-Term Headwinds but Shares Remain Attractive

Narrow-moat-rated O-I Glass reported underwhelming third-quarter results as persistent inventory destocking suppressed glass packaging demand. Net sales rose 3% year over year, largely due to strength in Europe, which offset steep declines in North America. O-I Glass continues to navigate a difficult operating environment as normalizing consumer demand and widespread inventory destocking weigh heavily on volumes. While we are encouraged by the company’s pricing gains in the quarter, we think most of its challenges will likely persist into 2024 before showing signs of improvement. As such, we've decreased our fair value estimate to $26 per share from $28 due to lower near-term revenue and profitability in our forecast.