CA - Louisiana-Pacific: Good Growth Prospects And Potential For Re-Rating

2024-05-30 16:40:56 ET

Summary

• Louisiana-Pacific Corporation's partnership with Lennar is expected to expand its geographic reach and increase market share, contributing to revenue growth.
• The company is focusing on shifting away from commodity OSB business and growing its Siding and value-added OSB business.
• LPX's margins are expected to improve as the business mix shifts towards higher-margin products and the company continues to optimize its cost structure and invest in operational efficiency.

Investment Thesis

Louisiana-Pacific Corporation ( LPX ) has good near-term as well as long-term growth prospects ahead. The company is executing well and its recent deal with Lennar ( LEN ) to sell siding and OSB (Oriented Strand Board) offerings across multiple geographies, and the nationwide rollout of its SmartSide Trim offering at Home Depot ( HD ) stores should help it gain share. In addition, the company’s focus on moving away from commodity OSB business and growing Siding and value-added OSB business through investments in mill and capacity expansions bodes well for revenue growth....

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