Louisiana-Pacific Struggles Amid Weak Housing Market But Shows Signs of Rebound
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Louisiana-Pacific's Q3 results were largely in line with expectations as weak housing markets weighed on wood product demand. Sales fell 14% across all segments.
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The siding business struggled amid weak housing construction. Sales fell 12% and EBITDA declined due to lower volumes.
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The OSB business saw a surprise rebound from a terrible Q2, with sales up 45% sequentially on higher prices. But housing weakness will continue to challenge OSB demand.
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Morningstar analysts increased their fair value estimate for LPX to $52 from $51 based on time value of money.
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Weak housing markets are expected to persist into 2023, but Louisiana-Pacific should benefit when demand eventually rebounds.