Trump announces trade deal with EU following months of negotiations
On Thursday, Truist Securities adjusted its price target for Louisiana-Pacific Corp (NYSE:LPX), reducing it to $126 from the previous $135, while maintaining a Buy rating on the stock. The company, which currently trades near $101.50, has demonstrated strong financial fundamentals with a perfect Piotroski Score of 9, according to InvestingPro data. Truist’s analyst cited solid siding demand and the company’s investment in growth as key factors, despite a slight reduction in earnings projections for the coming years. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading near its fair value.
Louisiana-Pacific Corp reported operating earnings per share (EPS) of $1.03, surpassing both Truist Securities’ estimate of $0.71 and the consensus on the Street of $0.86. With trailing twelve-month revenue of $2.94 billion and an impressive EBITDA of $662 million, the company maintains robust financial health, earning a "GREAT" overall score from InvestingPro. This performance was attributed to stronger-than-expected results in Oriented Strand Board (OSB) and South American markets, which offset lower earnings in Siding and Other segments.
During the fourth quarter, the company’s Siding segment continued to expand its market share, with a 3% year-over-year increase in volumes. This growth occurred even as single-family housing starts saw a 5% decline. Despite this progress, EBITDA margins were slightly impacted due to ongoing investment and inflationary pressures.
Looking forward, Louisiana-Pacific has provided guidance for the first quarter Siding EBITDA to be between $95 million and $105 million, based on sales forecasts of $390 million to $400 million, reflecting a 9-11% year-over-year increase. The full-year Siding EBITDA is expected to be between $415 million and $425 million, on sales of $1.65 billion to $1.70 billion, indicating a 7-9% year-over-year growth and EBITDA margins around 25%.
The company is proactively investing in growth and plans to increase selling and marketing expenses by an incremental $10 million to $15 million as part of its strategy for 2025. This is in line with its efforts to further penetrate the repair and remodeling (R&R) market and secure more contractor engagement.
As a result of the fourth quarter performance, guidance provided by the company, and commentary from management, Truist Securities has updated its earnings estimates. The firm now expects Louisiana-Pacific’s earnings to be $5.85 in 2025, down from the previous estimate of $6.25. Current analyst consensus shows mixed sentiment with targets ranging from $71 to $137, while InvestingPro analysis reveals 12 additional key insights about the company’s performance and prospects. The projections for 2026 and 2027 have also been adjusted to $6.50 (previously $6.95) and $7.00 (previously $7.45), respectively. Consequently, the price target has been revised to $126, reflecting these updated expectations.
In other recent news, Louisiana-Pacific Corporation reported robust financial results for the fourth quarter of 2024, surpassing analyst expectations with an earnings per share (EPS) of $1.03, compared to the forecasted $0.73. The company achieved a revenue of $681 million for the quarter, contributing to a full-year revenue of $2.9 billion. Louisiana-Pacific’s siding business set records for net sales and EBITDA, underscoring the company’s competitive strength in this segment. Despite these strong earnings, the company’s stock price fell by 8.55%, indicating potential investor concerns about future prospects or market conditions.
The company also announced plans for continued investment in capacity expansion and product innovation, with capital investments projected at approximately $200 million for 2025. Louisiana-Pacific aims for siding revenue growth between 7-9% in 2025, with expectations to reach $1.65 to $1.70 billion. Analyst feedback from firms like BMO Capital Markets and Goldman Sachs highlighted the company’s focus on product innovation and market share gains as key drivers for future growth. The company is also preparing for potential challenges, including tariffs and flat housing starts, which could impact growth. These developments reflect Louisiana-Pacific’s strategic focus on maintaining operational efficiency and expanding its market presence.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.