Fitch Ratings has affirmed Owens Corning's Long-Term Issuer Default Rating (IDR) and unsecured debt ratings at 'BBB+', and Short-Term IDR and CP rating at 'F1'.
The Rating Outlook is Stable.
The ratings reflect Owens Corning's leading market position in all its major businesses, strong brand recognition, balanced product, market and geographic diversification, modest leverage, and strong profitability and FCF generation. The ratings are constrained by market cyclicality and the company's exposure to volatile raw material costs. Owens Corning has a disciplined capital allocation policy. However, Fitch expects it to temporarily operate at the upper end of its leverage target for opportunistic acquisitions.
Key Rating Drivers
Modest Leverage: Owens Corning's EBITDA leverage was 2.2x at YE 2025. Fitch expects this ratio to increase to 2.6x at YE 2026 due to lower margins. This is modestly above the negative sensitivity of EBITDA leverage above 2.3x for the 'BBB+' IDR. Fitch expects EBITDA leverage to be at or below 2.3x at YE 2027 as revenues grow and margins partially recover. EBITDA leverage sustained at elevated levels due to lower-than-expected margins may lead to negative rating actions.
(CFO-capex)/debt was 18.6% in 2025. Fitch expects the ratio to be 11%-12% in 2026 and 15%-17% in 2027, below the negative sensitivity of 20% for the 'BBB+' IDR. The lower ratio is driven by higher capex in 2025 through 2027 to support capacity expansion plans and plant modernization initiatives. Capex as a percentage of sales was 8.2% in 2025. Fitch forecasts capex to be 8%-9% in 2026 and 7.5%-8.5% in 2027. Over the long term, Fitch expects capex as a percentage of sales to be around 4%-5% of revenues.
Subdued Demand Environment: Fitch expects lower volumes for Owens Corning's products in 2026, with revenues falling 3.5%-4.5% organically. Fitch's rating case forecast anticipates existing home sales and repair and remodel (R&R) spending will be flat in 2026, with weaker demand for larger discretionary R&R projects. Fitch forecasts single-family housing starts will fall by the low-single digits.
The conflict in Iran threatens this outlook through several channels. Higher oil prices are fueling renewed inflation risks. This may delay Federal Reserve rate cuts and keep 30-year mortgage rates above 6%, compared to Fitch's previous expectations of 6% by YE 2026. Persistently high and volatile mortgage rates, combined with weaker consumer confidence, are undermining buyer sentiment during the critical spring selling season.
Strong Profitability: Owens Corning's EBITDA and FCF margins are strong relative to its investment-grade building products peers. EBITDA margin is forecast to be 19.5%-20.5% in 2026 and 21%-22% in 2027, lower than the 22.5%-24% reported between 2021-2025 due to lower volumes. Higher oil prices will also strain margins in the near term. The company has historically been able to increase selling prices to offset inflationary pressures, particularly in its roofing segment. Fitch expects EBITDA margins to settle above 20% in the long term, above the high-teen EBITDA margin percentages reported between 2017 and 2020 due to productivity gains and larger scale.
Consistent FCF: Fitch expects FCF margins to settle around 3%-4% in 2026 and 5%-6% in 2027, below the 6.8% Owens Corning reported in 2025 and the high-single-digit to low-double-digit percentages in 2022-2024. Fitch expects FCF to be lower in the next few years due to elevated capex to support capacity expansion and higher dividends. In the long term, Fitch expects FCF margin to settle between 7% and 9% of revenues.
Leading Market Position: Owens Corning has strong leadership positions in all its core product offerings within roofing, insulation, and door segments. Fitch believes that its leading market positions and strong market share in core products provide pricing power and shelf-space allocation from distribution channels. Fitch expects these advantages to lead to higher and more stable operating margins through the cycle.
Diversification: Owens Corning has broad product portfolio and well-balanced geographic and end-market diversity, which provides some cushion against regional or end-market downturns. About 74% of revenues come from residential construction, of which more than two-thirds is directed to the more stable repair and remodel segment. The commercial construction and industrial markets account for 26% of revenues. The company's diversification is a credit positive relative to more U.S.-centric building products peers, with concentrated exposure to certain markets or distribution channels.
Disciplined Capital Allocation: Fitch expects Owens Corning to maintain a disciplined capital allocation framework while evaluating acquisition opportunities. The company has, at times, increased leverage to pursue strategic acquisitions, but it has deleveraged the balance sheet within 12-24 months. The company has tempered share repurchases in the past when leverage is elevated. Over time, management expects to return 50% of FCF to shareholders through dividends and share repurchases. However, in 2026, Owens Corning plans to return about $1 billion to shareholders. Fitch expects FCF to be directed towards share repurchases absent acquisitions.
Peer Analysis
Owens Corning's EBITDA leverage is similar to other strong investment-grade peers, including PPG Industries, Inc. (BBB+/Stable) and The Sherwin-Williams Company (BBB+/Stable). The company's (CFO-capex)/debt is currently lower than these peers due to elevated capex. Owens Corning has higher EBITDA margin than PPG and Sherwin-Williams. Owens Corning is similar in size to Mohawk Industries, Inc. (BBB+/Stable) but has higher EBITDA margin and higher EBITDA leverage. Owens Corning's geographic diversification is similar to Sherwin-Williams' and lower than PPG's and Mohawk's.
Fitch's Key Rating-Case Assumptions
Organic revenues fall 4%-5% in 2026 and improve 3%-4% in 2027;
EBITDA margin of 19.5%-20.5% in 2026 and 21%-22% in 2027;
Capex as a percentage of sales of 8%-9% in 2026 and 7.5%-8.5% in 2027;
--(CFO-capex)/debt of 11%-12% in 2026 and 15.5%-16.5% in 2027;
FCF margin of 3%-4% in 2026 and 5%-6% in 2027.
Corporate Rating Tool Inputs and Scores
Fitch scored the issuer as follows, using our Corporate Rating Tool (CRT) to produce the Standalone Credit Profile (SCP):
Business and financial profile factors (assessment, relative importance): Management (bbb, Lower), Sector Characteristics (bbb+, Moderate), Market and Competitive Positioning (bbb+, Moderate), Diversification and Asset Quality (bbb+, Higher), Company Operational Characteristics (bbb, Moderate), Profitability (a-, Moderate), Financial Structure (bbb, Higher), and Financial Flexibility (a, Moderate).
The quantitative financial subfactors are based on standard CRT financial period parameters: 20% weight for the latest historical year 2025, 40% for the forecast year 2026 and 40% for the forecast year 2027.
The Governance assessment of 'Good' results in no adjustment.
The Operating Environment assessment of 'aa-' results in no adjustment.
The SCP is 'bbb+'.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
Fitch's expectation that EBITDA leverage will sustain above 2.3x;
Fitch's expectation that (CFO-capex)/debt will sustain below 20%;
Adoption of a more aggressive capital allocation policy, including debt-funded share repurchases.
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
Fitch's expectation that EBITDA leverage will sustain below 1.8x, supported by management adopting more conservative financial policies;
Fitch's expectation that (CFO-capex)/debt will sustain above 25%.
Liquidity and Debt Structure
Owens Corning has robust liquidity, with $345 million of cash as of Dec. 31, 2025, and $1.45 billion of borrowing availability under its $1.5 billion RCF that matures in March 2030. The revolver supports the company's $1.5 billion CP program, which had $50 million outstanding at YE 2025.
Owens Corning has a well-spread debt maturity schedule, with $400 million maturing in 2026 and $500 million coming due in 2027. Fitch expects the company to refinance these maturities.
Issuer Profile
Owens Corning is a global building and construction materials leader with three integrated businesses: roofing, insulation, and doors.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Click here to access Fitch's latest quarterly Global Corporates Sector Forecasts Monitor data file which aggregates key data points used in our credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included.
Climate Vulnerability Signals
The results of our Climate.VS screener did not indicate an elevated risk for Owens Corning.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.
RATING ACTIONS
Entity / Debt
Rating
Prior
Owens Corning
LT IDR
BBB+
Affirmed
BBB+
ST IDR
F1
Affirmed
F1
senior unsecured
LT
BBB+
Affirmed
BBB+
senior unsecured
ST
F1
Affirmed
F1
Page
of 1
VIEW ADDITIONAL RATING DETAILS
Additional information is available on www.fitchratings.com
PARTICIPATION STATUS
The rated entity (and/or its agents) or, in the case of structured finance, one or more of the transaction parties participated in the rating process except that the following issuer(s), if any, did not participate in the rating process, or provide additional information, beyond the issuer's available public disclosure.
APPLICABLE CRITERIA
Corporates Recovery Ratings and Instrument Ratings Criteria (pub. 03 Aug 2024) (including rating assumption sensitivity)
Corporate Rating Criteria (pub. 10 Jan 2026) (including rating assumption sensitivity)
Sector Navigators - Addendum to the Corporate Rating Criteria (pub. 10 Jan 2026)
APPLICABLE MODELS
Numbers in parentheses accompanying applicable model(s) contain hyperlinks to criteria providing description of model(s).
Corporate Monitoring & Forecasting Model (COMFORT Model), v8.2.0 (1)
ADDITIONAL DISCLOSURES
Dodd-Frank Rating Information Disclosure Form
Solicitation Status
Endorsement Policy
ENDORSEMENT STATUS
Owens Corning EU Endorsed, UK Endorsed
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Fitch's international credit ratings produced outside the EU or the UK, as the case may be, are endorsed for use by regulated entities within the EU or the UK, respectively, for regulatory purposes, pursuant to the terms of the EU CRA Regulation or the UK Credit Rating Agencies (Amendment etc.) (EU Exit) Regulations 2019, as the case may be. Fitch's approach to endorsement in the EU and the UK can be found on Fitch's Regulatory Affairs page on Fitch's website. The endorsement status of international credit ratings is provided within the entity summary page for each rated entity and in the transaction detail pages for structured finance transactions on the Fitch website. These disclosures are updated on a daily basis.
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