O-I Glass, Inc. OI

Key data

The business

O-I Glass is the largest maker of glass bottles and jars in the world, the container behind a beer, a wine, a spirit, a jar of sauce. It runs furnaces across the Americas and Europe that melt sand, soda ash and recycled glass around the clock, then sells to brewers, wineries, distillers and food packers close by. Glass is heavy and cheap for its size, so a plant sells within a few hundred miles or freight eats the margin, which hands O-I real regional scale wherever it has plant density and long ties to the local bottler. The model turns on one thing: keeping furnaces near full. A furnace burns hot whether the orders come or not, so a few points of lost volume fall almost straight to the loss line. Two forces press on that volume, a slow drift toward cans and plastic in beer and soft drinks, and softer European demand. A program called Fit to Win is management's answer. Over all of it sits $4.6B of net debt against book equity of under $400M, with tangible book already negative. Deep-cyclical packaging is a business where the plant and the debt outlast three management teams, and the debt gets the last word.

The numbers

The last five quarters read as a business slipping, then a cliff.

Revenue held a narrow band near $1.6B, so the top line is not the problem. Beneath it is: after a profitable Q3 2025, O-I lost money in three of the next four quarters, and Q2 2026 booked a $972M net loss, a $6.33 per share hole, on non-cash writedowns marking some plants and goodwill, mostly European, below their carried value. Adjusted profit of $0.09 badly missed the $0.24 the Street modeled, a second straight miss. The European volume worry the last look hung the whole balance sheet on did not hold, and this writedown is management putting that reality on the page.

The fiscal table tells the cyclical story cleanly. 2022 was the peak, $3.67 a share as post-pandemic restocking ran hot, and every year since has been a loss, with 1H 2026 already down about $1.0B almost entirely on the writedown. The business still throws off roughly $750M of EBITDA on a trailing twelve month basis, which is where the value case lives.

Leverage is the entire game. Interest is covered just 1.5 times, and the refinancing wall looms. Liquidity is adequate for now, $339M of cash and a current ratio of 1.26, and FY2025 operating cash flow of $600M covered $432M of capex with room, but "for now" is the operative phrase against this debt load. The Street models a real recovery from here, $1.51 of earnings in 2027 and $1.98 in 2028. The variant is simple: at $7.14, near a 52-week low and under 5 times that 2027 number, the market is pricing a melting cube, and the print that settles who is right is European shipments turning positive while net debt to EBITDA falls back under 5.

Management

The record says the cost program has not reached the print yet. Under CEO Gordon Hardie and CFO John Haudrich, adjusted earnings missed in each of the last two quarters, $0.05 against $0.09 then $0.09 against $0.24, so Fit to Win is a promise the income statement has not yet paid. What weighs more than the misses is where insiders put their own cash. Five officers and directors bought on the open market in May 2026, about $279,000 with no sales, Burns and Chapin near $102,000 each, at six and seven dollars a share, plan status not disclosed but the pattern is discretionary conviction near the low. Buybacks stay token at $10M a quarter, the right restraint for a balance sheet this stretched. Pay leans little on stock.

How it fails or surprises you

The refinancing wall. $4.6B of net debt against EBITDA of about $750M and interest already covered only 1.5 times. Refinance at rates a few points above the old paper and the interest bill swallows most of cash earnings, leaving nothing for the equity. The tell is the coupon on the next term loan, not the volume line.

More writedowns (the number that argues back). The Q2 loss of $6.33 came from marking European assets down once. Book equity is already under $400M and tangible book negative, so a second impairment thins the sliver toward nothing, and no cost program offsets a shrinking glass market. This is the fact the cheap-on-earnings read explains least.

Volume turns and the cube stops melting (right tail). If European organic shipments turn positive and Fit to Win savings finally land, normalized EBITDA drifts toward $900M and FY2027 earns the $1.51 the Street models. At $7.14 that is under 5 times, and the stock re-rates hard because nobody is paying for a recovery while the writedown is fresh. First sign: two straight quarters of positive organic volume.

Closing thoughts

The payoff here turns on whether European glass demand stabilizes before the debt comes due. Two numbers settle it: organic shipments in Europe, and net debt to EBITDA. Shipments turn positive for two quarters and leverage falls under 5 times, the stock re-rates hard because at $7.14 nobody is paying for a recovery. Shipments stay flat or fall and leverage stays above 6, the refinancing risk is real and the equity thins toward nothing. Until then the stock is a levered bet on a shrinking glass market, and the people on the other side are not wrong to fear the debt. The left tail is refinancing, not operations: at 1.5 times interest coverage a cyclical does not get many bad quarters before the lenders, not the shareholders, own the outcome. The right tail is large precisely because the price already assumes the melt continues, and the insiders buying at these prices are voting that it does not.

The bet is still that people keep buying beer, wine and spirits in glass, and that the biggest bottle maker keeps its furnaces full enough to earn its way past the debt. It breaks if European volume keeps sliding, and the one pair of numbers that tells you first is organic shipments against net debt to EBITDA: shipments green and leverage under 5 means the equity lives, shipments red and leverage above 6 means it may not.