UBS Maintains a 'Sell' on Louisiana-Pacific Corp (LPX); Will Industry Respond to Higher/Attractive Pricing?

August 1, 2012 11:22 AM EDT
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Price: $18.95 -1.2%

Rating Summary:
    5 Buy, 8 Hold, 3 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 23 | Down: 34 | New: 34
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UBS maintains a 'Sell' on Louisiana-Pacific Corp (NYSE: LPX) price target of $9.00 (from $8.00).

Analyst, Gail S. Glazerman, viewed Q2 EBIT as largely in-line with consensus, and had $0.04 EPS consensus vs. LPX's $0.02 report. Glazerman raises Q3 EPS estimate to $0.04 and expects a modest decline in segment EBIT. FY12 EPS estimate raised from (0.25) to (0.15)

An important question asked: Will the industry respond to higher/attractive pricing? Glazerman's response, "The key driver of earnings is OSB pricing. Current prices are at attractive levels, well ahead of cash costs. Yet the industry is running below 70% of capacity. LPX management indicates there is enough capacity at mills which are running (vs idled) to service 900,000 starts worth of demand. Our outlook assumes this is not sustainable and there will be enough of a supply response to drive pricing down."

For an analyst ratings summary and ratings history on Louisiana-Pacific Corp click here. For more ratings news on Louisiana-Pacific Corp click here.

Shares of Louisiana-Pacific Corp closed at $10.32 yesterday.

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