Owens-Illinois Stock Rallies as Citi Sets Low Bar for Q3 Earnings

Shares of Owens-Illinois (NYSE: OI) have rallied significantly ahead of its third-quarter earnings release, buoyed by a Citi analyst report suggesting a low hurdle for the company to clear. The stock has gained 9.7% since packaging peer Crown Holdings initiated the sector's earnings season on Monday.

Citi's Pre-Earnings Outlook

Citi analysts, who maintain a Buy rating on the stock, anticipate Owens-Illinois will report third-quarter EBITDA of $266 million, a 19% decline year-over-year. This forecast is slightly below the consensus estimate of $269 million.

Despite the expected drop and ongoing cost headwinds, the firm believes the company can achieve the low end of its full-year EBITDA guidance range of $1.0 billion to $1.1 billion. Citi also noted the company's energy hedging strategy, which covers approximately 90% of its exposure for the fourth quarter of 2026 and the first quarter of 2027.

Diverging Regional Performance

The report highlights a stark contrast in expected regional performance. Citi projects a strong quarter in the Americas, with EBIT forecast to rise by $30 million year-over-year to $170 million, driven by cost savings and favorable price-cost dynamics. Volumes in the region are expected to be flat.

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Conversely, Europe's EBIT is projected to plummet by $74 million to just $21 million. This sharp decline is attributed to negative price-cost dynamics and low-single-digit volume declines, which are expected to more than offset any cost savings in the region.

Valuation and Sector Context

Owens-Illinois shares are currently trading at 5.1 times next-twelve-months EBITDA, a discount to their 10-year average multiple of 5.8 times, according to Citi. The broader paper and packaging sector has seen an average gain of 2.3% since earnings season began.

The early results from the sector have been mixed, with Amcor and Packaging Corporation of America reporting beats, Crown Holdings printing an in-line result, and Sonoco Products missing estimates. Owens-Illinois is scheduled to release its third-quarter results after the market closes on Tuesday.