On Mar 26, Zacks Investment Research downgraded
) to a Zacks Rank #5 (Strong Sell).
LOUISIANA PAC (LPX): Free Stock Analysis
POTLATCH CORP (PCH): Free Stock Analysis
UNIVL FST PRODS (UFPI): Free Stock Analysis
WEYERHAEUSER CO (WY): Free Stock Analysis
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Why the Downgrade?
Estimates have been moving downwards ever since Louisiana-Pacific
reported disappointing fourth quarter 2013 results on Feb 13.
Adjusted loss per share of 5 cents per share missed the Zacks
Consensus Estimate of earnings of 5 cents by a wide margin. The
quarterly loss was also a massive drop from the year-ago
quarter's earnings of 18 cents.
Despite decent revenues, the bottom line underperformed due to a
massive $2 million loss from foreign exchange, lower pricing in
Oriental Strand Board (OSB) segment and lower earnings before
interest, taxes, depreciation and amortization (EBITDA). Adjusted
EBITDA from continuing operations declined 66.2% from the
prior-year quarter owing to a rise in operating costs and a
decline in OSB segment EBITDA due to lower prices.
The Oriental Strand Board (OSB) segment has been witnessing soft
pricing for the past two quarters. Sales in the OSB segment
decreased 5% year over year in the fourth quarter due to a 20%
decline in pricing, despite a 17% increase in volume. The
segment's adjusted EBITDA also declined 66.2% year over year
attributable to lower pricing.
However, Louisiana-Pacific is optimistic about 2014, on the back
of improving housing market. The company intends to accelerate
its penetration in the major markets in the upcoming quarters.
Other Stocks to Consider
Better-ranked stocks in the sector include
Universal Forest Products Inc.
) with a Zacks Rank #1 (Strong Buy) and
) with a Zacks Rank #2 (Buy).