Core Insights - Investors are evaluating Louisiana-Pacific (LPX) and Trex (TREX) as potential undervalued stocks in the Building Products - Wood sector [1] Valuation Metrics - Both LPX and TREX currently hold a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions for both companies [3] - LPX has a forward P/E ratio of 18.91, while TREX has a higher forward P/E of 29.99 [5] - The PEG ratio for LPX is 1.23, suggesting a more favorable valuation relative to its expected earnings growth compared to TREX's PEG ratio of 2.56 [5] - LPX's P/B ratio stands at 4.27, significantly lower than TREX's P/B ratio of 8, indicating a better market value relative to book value for LPX [6] Value Grades - Based on the valuation metrics, LPX has earned a Value grade of B, while TREX has received a Value grade of D, suggesting that LPX is currently the superior value option [6][7]

Core Insights - Louisiana-Pacific Corporation (LPX) reported better-than-expected fourth-quarter 2024 results, with earnings and net sales exceeding Zacks Consensus Estimates, driven by strong demand in the Siding segment and disciplined capital management [1][4][9] - The company achieved adjusted EPS of $1.03, surpassing the consensus estimate of 79 cents by 30.4%, and net sales of $681 million, which was 2.5% above the consensus estimate [4] - Despite challenges in the OSB market, LPX's strategic execution and operational efficiency helped mitigate pressures, leading to a successful year overall [1][10] Financial Performance - Adjusted EBITDA for the fourth quarter was $125 million, down 3.1% year-over-year, primarily due to pricing pressures in the OSB segment [5] - The Siding segment's sales reached $362 million, a 9% increase from the prior year, supported by a 3% rise in volume and a 6% increase in average selling prices [6] - OSB segment sales decreased 2% year-over-year to $267 million, impacted by a 7% decline in OSB prices, although volumes increased by 6% [7] Segment Analysis - The Siding segment maintained profitability with an adjusted EBITDA of $72 million, a slight increase of 1% from the previous year, despite higher sales and marketing expenses [6] - The OSB segment's adjusted EBITDA fell 15% year-over-year to $50 million due to lower prices [7] - LP South America (LPSA) reported sales of $50 million, a 5% decline year-over-year, but adjusted EBITDA increased 16% to $13 million due to cost management [8] 2024 Highlights - For the full year 2024, LPX's adjusted EPS was $5.88, up 82.6% from $3.22 in 2023, with total revenues of $2.9 billion, a 14% increase from the previous year [9] - The Siding business was a key driver of success, achieving a 17% increase for the year, outperforming the broader market [10] - The company maintained an EBITDA margin of 25% for the Siding segment, despite challenges in the repair and remodel market [10] Cash Flow and Shareholder Returns - At the end of 2024, LPX had $900 million in liquidity, with cash and cash equivalents increasing to $340 million from $222 million in 2023 [12] - The company repurchased 2.4 million shares for $212 million in 2024, with $238 million remaining under share repurchase authorizations [13] 2025 Outlook - For Q1 2025, LPX expects Siding revenue growth of 9% to 11%, projecting revenue between $390 million and $400 million [14] - The company anticipates full-year Siding revenue growth of 7% to 9%, with adjusted EBITDA expected to be between $415 million and $425 million [16] - For the OSB segment, adjusted EBITDA is projected to be between $200 million and $210 million, with a focus on maintaining cost discipline and expanding higher-margin products [17] Capital Expenditures - Capital expenditures in 2024 were $183 million, with plans to increase investment to approximately $410 million in 2025, indicating confidence in future growth [18]

Financial Data and Key Metrics Changes - In Q4 2024, Louisiana-Pacific Corporation reported $681 million in sales, $125 million in EBITDA, and $105 million in operating cash flow, with a total of $605 million in operating cash flow for the full year [8][10][28] - For the full year, sales increased by 14% to $2.9 billion, and EBITDA rose by 44% to $688 million, resulting in earnings per share nearly doubling to $5.88 [9][10] - The company ended 2024 with $340 million in cash, zero net debt, and almost $900 million in total liquidity [28] Business Line Data and Key Metrics Changes - Siding sales grew by 9% in Q4 and 17% for the full year, reaching $1.56 billion, contributing significantly to overall revenue growth [8][9][13] - OSB segment faced a decline in prices but managed to achieve EBITDA above long-term cycle averages through efficient cost control and disciplined capacity management [15][26] - Siding achieved a 25% EBITDA margin for the full year, a 500 basis point increase from 2023, driven by volume growth and price increases [24] Market Data and Key Metrics Changes - Total US housing starts were down 4% for the year and 6% in Q4, but single-family starts were up 7% for the full year, indicating a better performance in that segment [12][13] - The repair and remodeling market saw a decline in expenditures estimated to be down low to mid-single digits [12][13] Company Strategy and Development Direction - The company plans to increase investments in new product innovation, demand creation, and capacity expansion to meet customer needs, particularly in siding [16][18] - Significant capital investments of about $200 million are expected in growth capital, primarily in the second half of 2025, to support capacity expansion [35] - The focus for 2025 includes share gains and volume growth in siding, with a healthy order file indicating strong demand [16][30] Management's Comments on Operating Environment and Future Outlook - Management expects 2025 to be another flat year for housing starts, with a modest rebound in repair and remodeling spending anticipated [15][31] - The company is confident in its growth strategy, emphasizing the importance of safety and operational excellence [19][37] - Management highlighted the need for new press capacity in the next two to three years to support siding growth [33] Other Important Information - The company achieved a world-class total incident rate of 0.67% for safety, although management aims for continuous improvement [10][11] - The company has plans for parallel expansion projects to enhance siding production capacity, with a focus on efficiency and innovation [126][135] Q&A Session Summary Question: Comments on siding demand and Lennar pull-through - Management indicated that siding demand is strong, with full contract execution with Lennar meeting or exceeding expectations [42][44] Question: Shift in production to structural solutions - Management confirmed that investments are needed to grow structural solutions, which are more margin-accretive, and that they are managing production effectively [47][48] Question: EBITDA and margin levels in siding for 2025 - Management expects a 25% EBITDA margin for siding, with inflationary pressures and increased marketing expenses impacting margins [54][56] Question: Siding capacity expansion plans - The Holton expansion will add about 300 million feet of volume, with further details on costs to be shared later [62][63] Question: Raw material and freight expectations for 2025 - Management discussed potential raw material inflation and the speculative nature of future costs, with no assumptions made regarding tariffs [76][80] Question: Approach to tariffs and pricing strategy - Management noted that OSB pricing is influenced by market conditions, and they are prepared to adjust supply chains if tariffs impact costs [84][86] Question: Siding sales growth targets - Management indicated that a recovering housing market could allow for higher growth rates beyond the current 7% to 9% target [88][92] Question: Customer inventory management - Management reported improved visibility into customer inventories, which are currently normal for this time of year [117][118]

Financial Performance - In 2024, the company's net sales reached $2,941 million, with Siding contributing $1,558 million (53%), OSB contributing $1,184 million (40%), and LP South America contributing $190 million (6%) to total sales[21]. - Net sales for 2024 increased by $360 million (or 14%) to $2.9 billion, with Siding revenue up by $230 million (or 17%) to $1.6 billion and OSB revenue up by $159 million (or 15%) to $1.2 billion[172]. - Net income rose by $243 million (or 137%) to $420 million ($5.89 per diluted share), driven by a $210 million increase in Adjusted EBITDA[173]. - Adjusted EBITDA for the total company was $688 million in 2024, up from $478 million in 2023[192]. - Adjusted Diluted EPS increased to $5.88 in 2024 from $3.22 in 2023[194]. - The company recognized a tax provision of $140 million in 2024, compared to $74 million in 2023, with a significant difference attributed to state and foreign income taxes[209]. - Cash generated from operations in 2024 was $605 million, significantly up from $316 million in 2023, attributed to higher net income and changes in working capital[214]. Segment Performance - The Siding segment reported net sales of $1,558 million for the year ended December 31, 2024, representing a 17% increase from $1,328 million in 2023[196]. - Adjusted EBITDA for the Siding segment increased by 45% to $390 million in 2024, up from $269 million in 2023[196]. - OSB segment net sales increased by 15% to $1,184 million in 2024, up from $1,026 million in 2023, with Adjusted EBITDA rising by 35% to $298 million[199]. - The LPSA segment reported net sales of $190 million in 2024, an 8% decrease from $205 million in 2023, with Adjusted EBITDA remaining flat at $42 million[202]. - For the OSB - Structural Solutions product line, net sales increased by 15% to $650 million in 2024, while OSB - Commodity also saw a 15% increase to $514 million[199]. Operational Efficiency - The company operates 22 plants across the U.S., Canada, Chile, and Brazil, with a focus on improving operational efficiency measured by Overall Equipment Effectiveness (OEE)[21][36]. - The Overall Equipment Effectiveness (OEE) for Siding was 77% in 2024, consistent with 2023, while OSB improved to 78% from 75%[69]. - The company has implemented a Serious Injury and Fatality (SIF) prevention program to enhance safety measures and track Weighted Incident Rate (WIR)[51]. Market Position and Strategy - The Siding segment is the largest manufacturer of engineered wood siding in North America, with plans to increase production capacity through new plants and facility expansions[22]. - The company is positioned as the leading producer of OSB and siding products in South America, capitalizing on the growing demand for wood-based residential construction[25]. - The company aims to grow its Siding business by leveraging demand for sustainable engineered wood products, which are less sensitive to housing market cyclicality[26]. - The company plans to expand internationally, particularly in South America, to leverage demand for wood-based construction materials[32]. Customer Base - The top ten customers accounted for approximately 49% of the company's net sales in 2024, indicating a broad customer base[34]. Workforce and Inclusion - As of December 31, 2024, the company employed approximately 4,300 team members, with 2,800 in the United States, 800 in Canada, and 700 in South America[49]. - The company aims to cultivate a diverse workforce and has established programs to support inclusion and belonging among team members[52]. - Compensation and benefits programs include stock-based awards, annual cash incentives, and various health and wellness benefits tailored to employee needs[56][57]. - The executive management team oversees workforce inclusion, talent development, and compliance with equal employment opportunity laws[53]. Risks and Challenges - The company faces risks related to cybersecurity breaches that could disrupt operations and lead to significant costs and liabilities[87]. - International operations are exposed to risks from geopolitical events, trade policies, and potential supply chain disruptions[93]. - The company may pursue acquisitions and strategic transactions, which carry risks and may not achieve expected benefits[96]. - Ongoing military conflicts, such as the Russia-Ukraine conflict, have negatively impacted material costs and supply chain stability[98]. - The company is subject to significant environmental regulations, which may lead to increased compliance costs and operational restrictions[119]. - The unpredictability of natural disasters could affect the supply and costs of raw materials, impacting production capabilities[104]. - Increased competition in the building products industry may hinder the company's ability to sustain net sales and profitability[114]. Compliance and Legal Matters - The company is subject to various legal proceedings and environmental claims, which could result in substantial costs and liabilities[121]. - The company is subject to the U.S. Foreign Corrupt Practices Act and other anti-corruption laws, which could lead to civil or criminal penalties if not complied with[123]. - The company maintains a compliance program to ensure adherence to anti-corruption laws, but there is no guarantee of complete effectiveness, which could adversely impact financial condition and results of operations[125]. Economic Conditions - Future economic conditions and demand for homes are uncertain due to inflationary impacts, including interest rates and consumer confidence[175]. - Inflation has increased costs of raw materials and labor, potentially reducing profitability if price increases cannot be implemented[132]. Shareholder Returns - The company paid quarterly cash dividends of $0.26 per share for each quarter of 2024, up from $0.24 per share in 2023[165]. - As of December 31, 2024, the company had $238 million of repurchase authorization remaining under the 2024 Share Repurchase Program[166].

Louisiana-Pacific (LPX) came out with quarterly earnings of $1.03 per share, beating the Zacks Consensus Estimate of $0.79 per share. This compares to earnings of $0.71 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 30.38%. A quarter ago, it was expected that this home construction supplier would post earnings of $0.88 per share when it actually produced earnings of $1.22, delivering a surprise of 38.64%.Over the last four qu ...

LP Building Solutions Reports Fourth Quarter and Full Year 2024 Results, and Provides First Quarter and Full Year Outlook for 2025 NASHVILLE, Tenn. (Feb 19, 2025) - Louisiana-Pacific Corporation (LP) (NYSE: LPX), a leading manufacturer of high-performance building products, today reported its financial results for the fourth quarter and year ended December 31, 2024. Key Highlights for the Fourth Quarter of 2024, Compared to the Fourth Quarter of the Prior Year (2) This is a non-GAAP financial measure. Recon ...

Core Viewpoint - Louisiana-Pacific Corporation (LPX) is expected to report its fourth-quarter 2024 results on February 19, with positive earnings expectations despite some challenges in specific segments [1][12]. Financial Performance - In the last reported quarter, LPX's earnings and net sales exceeded the Zacks Consensus Estimate by 38.6% and 3.2%, respectively, although both metrics declined year-over-year by 20.7% and 0.8% [2]. - The Zacks Consensus Estimate for LPX's fourth-quarter earnings per share (EPS) is 79 cents, reflecting an increase of 11.3% from 71 cents reported a year ago [3]. - The consensus estimate for net sales is $664.4 million, indicating a 1% increase from $658 million in the prior year [3]. Revenue Drivers - The fourth-quarter revenue is anticipated to increase year-over-year, primarily driven by the strength in the Siding business, which accounted for 54.4% of sales in the third quarter [4]. - The Siding segment is expected to see revenue growth of 9-10% year-over-year, reaching approximately $365 million, supported by solid demand and the rollout of SmartSide products [6]. - The consensus estimate for the Siding segment's net sales is pegged at $370 million, up from $332 million in the previous year [6]. Segment Challenges - The Oriented Strand Board (OSB) segment, which accounted for 32.8% of sales, is facing a challenging price environment, with expected net sales of $249 million, down from $272 million in the prior year [7][8]. - Seasonal downtime is expected to impact OSB volumes in the fourth quarter [7]. Margin Expectations - LPX anticipates a consolidated adjusted EBITDA of $85-$105 million, down from $129 million reported a year ago, with Siding contributing $70-$80 million [10]. - The consensus estimate for adjusted EBITDA for the Siding segment is $85 million, an increase from $72 million in the previous year, while OSB's adjusted EBITDA is expected to decline to $41 million from $59 million [11]. Earnings Prediction - The model predicts an earnings beat for LPX, supported by a positive Earnings ESP of +21.14% and a Zacks Rank of 3 (Hold) [12][13].

Core Insights - Louisiana-Pacific (LPX) has consistently surpassed earnings estimates, averaging a 25.50% beat over the last two quarters [1][2] - The company reported earnings of $1.22 per share against a consensus estimate of $0.88, resulting in a surprise of 38.64% for the last quarter [2] - The positive Earnings ESP of +21.14% indicates bullish sentiment among analysts regarding Louisiana-Pacific's near-term earnings potential [6] Earnings Performance - In the previous quarter, Louisiana-Pacific's earnings were $2.09 per share, exceeding the expected $1.86, which resulted in a surprise of 12.37% [2] - The company's strong earnings history has led to upward revisions in estimates, contributing to a positive Earnings ESP [3][6] Earnings ESP and Zacks Rank - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a high likelihood of another earnings beat, with historical data indicating a nearly 70% success rate for stocks with this profile [4][6] - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, reflecting the latest analyst revisions [5] Future Outlook - Louisiana-Pacific's next earnings report is anticipated on February 19, 2025, and the current positive indicators suggest potential for continued strong performance [6]

Louisiana-Pacific (LPX) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended December 2024. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The earnings report, which is expected to be released on February 19, 2025, might help the stock move higher if these key numbers are bett ...

Group 1: Zacks Style Scores Overview - Zacks Style Scores is a unique set of guidelines that rates stocks based on value, growth, and momentum characteristics, serving as complementary indicators for the Zacks Rank [2][3] - Each stock is assigned a rating of A, B, C, D, or F, with A being the best score indicating a higher chance of outperforming the market [3] - The Style Scores are categorized into Value Score, Growth Score, Momentum Score, and VGM Score, which combines all three styles [3][4][5][6] Group 2: Value Score - The Value Style Score focuses on identifying stocks that are trading under their true value by analyzing ratios like P/E, PEG, Price/Sales, and Price/Cash Flow [3] Group 3: Growth Score - The Growth Style Score emphasizes a company's financial strength and future outlook, taking into account projected and historical earnings, sales, and cash flow [4] Group 4: Momentum Score - The Momentum Style Score helps investors capitalize on upward or downward trends in stock prices or earnings outlook, using factors like one-week price change and monthly percentage change in earnings estimates [5] Group 5: VGM Score - The VGM Score rates stocks based on a combination of value, growth, and momentum, making it a strong indicator to use alongside the Zacks Rank [6] Group 6: Zacks Rank Performance - The Zacks Rank model, which utilizes earnings estimate revisions, has shown that 1 (Strong Buy) stocks have produced an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [8] - There are over 800 top-rated stocks available, including more than 200 with a Strong Buy rank and 600 with a Buy rank [9] Group 7: Stock Example - Louisiana-Pacific Corporation - Louisiana-Pacific Corporation (LPX) is a leading manufacturer of sustainable engineered wood building materials and has a Zacks Rank of 2 (Buy) with a VGM Score of B [11] - LPX has a Momentum Style Score of B, with shares increasing by 9.4% over the past four weeks, and two analysts have revised their earnings estimates upwards for fiscal 2024 [12] - The Zacks Consensus Estimate for LPX has increased by $0.10 to $5.64 per share, with an average earnings surprise of 30.7% [12]