O-I Glass Earnings: Demand Headwinds Offset by Selling Price Growth; Shares Remain Attractive

Narrow-moat-rated O-I Glass reported fourth-quarter results that capped off a challenging year for the glass packaging producer. The company navigated a handful of challenges in 2023 as persistent inventory destocking and softening consumer spending in many of its end markets weighed on volume. Net sales in the fourth quarter declined 3% year over year despite a 16% drop in volume, largely due to strong price growth. Management said O-I will likely experience the inverse in 2024, as it anticipates some volume growth but expects to lose price on some annual contracts with customers. As such, we've decreased our fair value estimate to $25 per share from $26 to reflect lower near-term revenue in our forecast.