DA Davidson cuts Louisiana-Pacific stock price target on OSB challenges

Published 25/06/2025, 15:40
DA Davidson cuts Louisiana-Pacific stock price target on OSB challenges

Investing.com - DA Davidson lowered its price target on Louisiana-Pacific Corp (NYSE:LPX) to $117.00 from $123.00 on Monday, while maintaining a Buy rating on the building materials manufacturer. The company, currently trading at $87.17 with a market cap of $6.1 billion, maintains a healthy P/E ratio of 15.25. According to InvestingPro data, LPX’s financial health score is rated as GREAT.

The research firm cited more challenging oriented strand board (OSB) market dynamics as the primary reason for the adjustment, noting that benchmark pricing has declined approximately $70 per thousand square feet since early May.

DA Davidson pointed out that this price decline contrasts with Louisiana-Pacific’s typical guidance assumption that pricing remains flat over the balance of the quarter, prompting the firm to lower its second-quarter 2025 and future forecasts.

Despite the OSB market challenges, DA Davidson emphasized that investors should focus on the above-market growth and expanding margins within Louisiana-Pacific’s Siding business, which the firm expects to continue performing strongly.

The research firm projected that Louisiana-Pacific’s Siding segment will remain a standout performer within the building products sector throughout 2025, supporting its decision to maintain a Buy rating despite the price target reduction.

In other recent news, Louisiana-Pacific Corporation reported its Q1 2025 earnings, surpassing market expectations with an earnings per share (EPS) of $1.27, exceeding the forecasted $1.22. The company’s revenue reached $724 million, slightly above the anticipated $711.71 million. This performance was bolstered by an 11% growth in its siding business, despite a challenging market environment. Additionally, Louisiana-Pacific held its annual stockholder meeting, where Kelly H. Barrett, Lizanne C. Gottung, and Dustan E. McCoy were elected as Class I directors to serve until the 2028 annual meeting. The appointment of Deloitte & Touche LLP as the independent auditor was ratified with a significant majority. Analysts from firms such as BMO Capital Markets and TruSecurities expressed optimism about the company’s strategic initiatives in product innovation and market expansion. Louisiana-Pacific also provided guidance for Q2 2025, projecting siding revenue between $445 million and $455 million. The company anticipates a $12 million EBITDA impact from tariffs, highlighting ongoing challenges in the market.

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