Louisiana Pacific (LPX) Surpasses Expectations with Impressive Q1 Earnings

By Don Francis, Editor
May 10, 2024 10:17 AM UTC
Louisiana Pacific (LPX) Surpasses Expectations with Impressive Q1 Earnings

DA Davidson's Steven Chercover raised their price target on Louisiana Pacific (NYSE: LPX) by 8.9% from $90 to $98 on 2024/05/09. The analyst maintained their Strong Buy rating on the stock.

Chercover's update came following Louisiana Pacific's impressive first-quarter earnings report, which was released on May 8, 2024. The company exceeded expectations with a strong earnings beat, better-than-expected guidance for the second quarter, and an upgraded forecast for siding revenue and EBITDA for the full year.

In the first quarter of 2024, Louisiana Pacific reported earnings per share (EPS) of $1.53, surpassing the Zacks Consensus Estimate of $1.13 by a significant margin of 350%. This was also a substantial increase of 350% compared to the EPS of $0.34 in the first quarter of 2023.

The company's revenue for the first quarter stood at $724 million, beating the Zacks Consensus Estimate of $677 million by 24%. Compared to the first quarter of 2023, revenue saw a robust growth of 24%, reaching $584 million.

LPX's EBITDA for the first quarter of 2024 was $182 million, marking a remarkable year-over-year increase of 175.8%. The siding segment revenue recorded $361 million, up 9% year-over-year, while the siding segment EBITDA reached $90 million, showing a growth of 34% compared to the same period last year.

The Oriented Strand Board (OSB) segment also performed well, with revenue of $313 million, up 65% year-over-year. The OSB segment EBITDA for the first quarter of 2024 was $90 million, a significant improvement compared to the $5 million reported in the first quarter of 2023.

Furthermore, Louisiana Pacific guided for a strong second quarter and full-year outlook. For the second quarter of 2024, the company expects EBITDA in the range of $220 million to $240 million. The siding segment revenue is projected to grow between 20% and 25%, with an anticipated siding segment EBITDA of $95 million to $105 million. The OSB segment EBITDA is expected to be in the range of $125 million to $135 million.

Looking ahead to the full year of 2024, Louisiana Pacific forecasts an EBITDA of $655 million to $685 million. The company projects siding revenue growth of 11% to 13%, with a siding segment EBITDA in the range of $340 million to $360 million. The OSB segment EBITDA is expected to reach $315 million to $325 million. Additionally, the company plans for capital expenditures of $200 million to $220 million.

Chairman and CEO Brad Southern expressed optimism about the company's performance, stating that the first quarter saw robust demand for siding and OSB products, increased volume, higher commodity prices, and improved operating efficiency driving margin expansion. He also mentioned that strong demand for SmartSide and Structural Solutions has continued into the second quarter, leading to an increase in the company's outlook for both the second quarter and the full year.

In addition to DA Davidson's Steven Chercover, other analysts also updated their ratings on LPX on May 9, 2024. RBC Capital's Matthew McKellar raised their price target from $88 to $105, a 19.3% increase, while maintaining a Buy rating on the stock. BMO Capital's Ketan Mamtora also raised their price target by 19.3%, from $83 to $99, and maintained their Buy rating.

Currently, 83.3% of the top-rated analysts rate LPX as a Strong Buy or Buy, while 16.7% consider it a Hold. Notably, no analysts recommend or strongly recommend selling the stock.

The consensus forecast among analysts is that LPX's upcoming year will deliver earnings per share (EPS) of $6.61. If the analysts' predictions hold true, LPX's next yearly EPS will see a substantial year-over-year increase of 80.6%.

Since LPX's latest quarterly report on May 8, 2024, the stock price has experienced a minor decline of 1.3%. However, when looking at the stock's performance over the past year, it has shown impressive growth of 36.5%. During this period, LPX has outpaced the S&P 500, which has grown by 26.6%.

DA Davidson analyst Steven Chercover is highly regarded, ranked in the top 20% among 4,579 Wall Street analysts by WallStreetZen. With an average return of 13.2% and a win rate of 65.2%, Chercover specializes in analyzing the Basic Materials and Communication Services sectors, among others.

Louisiana-Pacific Corporation, headquartered in Nashville, TN, is a leading manufacturer of building products used in new home construction, repair and remodeling, and outdoor structures. The company sells its products to retailers, wholesalers, and homebuilding and industrial businesses across North and South America, Asia, Australia, and Europe.

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