Jul. 15 at 1:53 PM
$OI We model Ebitda at $ 1.325 billion in 2027, growing to
$1.4 billion in 2029.
The One Big Beautiful Bill has given O-I a helping hand with the change in the percent of its interest expense that can be deducted versus earnings. The company should start reporting a lower tax rate, which was high because of the disallowed/deferred interest expense deduction. O-I should be able to deduct interest that it has already paid but was unable to deduct for tax purposes, lowering cash taxes paid. This is similar to a net operating loss carryforward.
This should create a flywheel effect, with cash being generated in excess of GAAP earnings. The cash could be used to pay down debt, which then lowers interest expense and grows after-tax earnings.
We see O-l reporting around
$2 a share of earnings next year, growing to
$2.70 in 2028 and more than
$3 in 2029. We think the stock can trade at
$25 to
$30 within a couple of years.
Thank you, Meryl.
