JPMorgan analyst Michael Rehaut downgrades Owens Corning (OC) to Underweight from Neutral while upgrading Mohawk Industries (MHK) to Neutral from Underweight. His top picks in Building Products remain Stanley Black & Decker (SWK) and Fortune Brands (FBHS). Rehaut's conversations with both the buy-side and sell-side point to an "overly optimistic view" of Owens Corning's earnings power this year, both as it relates to the potential benefit in its Roofing segment from IMO 2020, as well as the growth prospects across its other segments. The analyst downgrades the shares and notes his estimates are well below the Street. Rehaut's upgrade of Mohawk to Neutral follows the stock's "material" level of underperformance since 2018, which he believes results in a "reasonable to relatively inexpensive valuation."

RBC Capital raised the firm's price target on Mohawk Industries to $108 from $106 and keeps a Sector Perform rating on the shares. The company's Q1 earnings beat was driven by stronger Flooring North America and Ceramic segments, which offset weakness in Rest of World, or ROW, segments, though its price/cost dynamic worsened as ROW saw price declines accelerating, the analyst tells investors in a research note. The management's unchanged expectations for second-half price/mix/volume recovery could also prove optimistic given higher-for-longer rates, RBC added.

Owens Corning (OC) announced the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in connection with the company's previously announced acquisition of Masonite (DOOR). The expiration of the waiting period occurred at 11:59 p.m. on April 26. The expiration of the HSR Act waiting period satisfies a closing condition for the transaction. Masonite previously announced that its shareholders voted to approve the company's acquisition by Owens Corning at its special meeting of shareholders. The transaction is anticipated to close in May, subject to satisfaction of the remaining customary closing conditions.