Ketan Mamtora, an analyst from BMO Capital, maintained the Hold rating on Louisiana-Pacific (LPX – Research Report). The associated price target remains the same with $108.00.
Ketan Mamtora has given his Hold rating due to a combination of factors impacting Louisiana-Pacific’s stock. The company’s strategy to increase market share in the Siding segment and improve margins over time is promising, yet there are immediate challenges such as an uncertain macroeconomic environment and potential disruptions from tariffs that could affect demand. Additionally, the company’s free cash flow is expected to be modest in the next few years due to high capital expenditures, which could limit share repurchases.
Ketan Mamtora also notes that while the risk/reward profile is becoming more appealing following a recent stock pullback, the demand outlook remains stable with some uncertainties. The potential impact of tariffs could lead to higher prices, benefiting the company’s oriented strand board segment but presenting a more complex scenario for the Siding business. Furthermore, the company’s capital allocation strategy prioritizes growth and dividends in the Siding business and share repurchases funded by the OSB segment, with significant capital investments anticipated to support Siding growth in the coming years.
Mamtora covers the Industrials sector, focusing on stocks such as Beacon Roofing Supply, Louisiana-Pacific, and Masco. According to TipRanks, Mamtora has an average return of 16.5% and a 69.70% success rate on recommended stocks.
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