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Norbord (OSB) Upgraded to Strong Buy on Bright Prospects
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On Jun 29, Zacks Investment Research upgraded Norbord Inc. to a Zacks Rank #1 (Strong Buy). Going by the Zacks model, companies sporting a Zacks Rank #1 have strong chances of outperforming the broader market.
Year to date, Norbord’s shares have yielded nearly 21.70% return, outperforming the gain of 12.06% recorded by the Zacks categorized Building Products Wood industry.
Why the Upgrade?
Market sentiments have been favoring Norbord for quite some time now, especially after it reported impressive first-quarter 2017 results. The company’s share price has increased roughly 3.54% since the results release on May 2. Though the quarter’s earnings came in below the Zacks Consensus Estimate, it surpassed the year-ago tally by 152.2%. The results were primarily driven by healthy demand for oriented strand board in North America.
In the quarters ahead, we believe that Norbord will gain from improving housing market conditions in the U.S. Per the consensus forecast from U.S. housing economists, housing starts will likely improve 8% year over year to 1.26 million in 2017. Also, the company is seeing strong product demand from prime customers, better pricing and lower supply chain inventories, which is likely to drive its results in second-quarter 2017.
Also, Norbord is committed toward expanding and modernizing its existing OSB mills. For instance, the company has $135 million investment plan for the development of its Inverness, Scotland OSB mill while is working on a plan for upgrading its Chambord, Quebec OSB mill. Recently, the company secured wood allocation for its Chambord mill.
Moreover, in May 2017, the company tripled its quarterly dividend rate to C$0.30 per share. The revision was primarily driven by its healthy cash flow position and fall in net debt to capitalization ratio.
Over the last 60 days, the Zacks Consensus Estimate on Norbord increased 79.7% to $1.15 for the second quarter and 20.3% to $3.26 for 2017. Also, the company has an Earnings ESP of +13.50% for 2017. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Norbord Inc. has a market capitalization of $2.48 billion. Other stocks worth considering in the industry include Boise Cascade, L.L.C. (BCC - Free Report) , Potlatch Corporation (PCH - Free Report) and Weyerhaeuser Company (WY - Free Report) . While Boise Cascade sports a Zacks Rank #1, both Potlatch Corporation and Weyerhaeuser carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Boise Cascade’s financial performance has been impressive, with an average positive earnings surprise of 114.74% for the last four quarters. Also, earnings estimates for 2017 and 2018 have been revised upward, over the last 60 days.
Potlatch Corporation pulled off an average positive earnings surprise of 42.59%. Its earnings estimates for 2017 and 2018 have been revised upward, over the last 60 days.
Weyerhaeuser Company delivered an earnings surprise of 22.22% in the last quarter. Its earnings estimates for 2017 and 2018 have been revised upward, over the last 60 days.
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Norbord (OSB) Upgraded to Strong Buy on Bright Prospects
On Jun 29, Zacks Investment Research upgraded Norbord Inc. to a Zacks Rank #1 (Strong Buy). Going by the Zacks model, companies sporting a Zacks Rank #1 have strong chances of outperforming the broader market.
Year to date, Norbord’s shares have yielded nearly 21.70% return, outperforming the gain of 12.06% recorded by the Zacks categorized Building Products Wood industry.
Why the Upgrade?
Market sentiments have been favoring Norbord for quite some time now, especially after it reported impressive first-quarter 2017 results. The company’s share price has increased roughly 3.54% since the results release on May 2. Though the quarter’s earnings came in below the Zacks Consensus Estimate, it surpassed the year-ago tally by 152.2%. The results were primarily driven by healthy demand for oriented strand board in North America.
In the quarters ahead, we believe that Norbord will gain from improving housing market conditions in the U.S. Per the consensus forecast from U.S. housing economists, housing starts will likely improve 8% year over year to 1.26 million in 2017. Also, the company is seeing strong product demand from prime customers, better pricing and lower supply chain inventories, which is likely to drive its results in second-quarter 2017.
Also, Norbord is committed toward expanding and modernizing its existing OSB mills. For instance, the company has $135 million investment plan for the development of its Inverness, Scotland OSB mill while is working on a plan for upgrading its Chambord, Quebec OSB mill. Recently, the company secured wood allocation for its Chambord mill.
Moreover, in May 2017, the company tripled its quarterly dividend rate to C$0.30 per share. The revision was primarily driven by its healthy cash flow position and fall in net debt to capitalization ratio.
Over the last 60 days, the Zacks Consensus Estimate on Norbord increased 79.7% to $1.15 for the second quarter and 20.3% to $3.26 for 2017. Also, the company has an Earnings ESP of +13.50% for 2017. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Norbord Inc. Price and Consensus
Norbord Inc. Price and Consensus | Norbord Inc. Quote
Other Stocks to Consider
Norbord Inc. has a market capitalization of $2.48 billion. Other stocks worth considering in the industry include Boise Cascade, L.L.C. (BCC - Free Report) , Potlatch Corporation (PCH - Free Report) and Weyerhaeuser Company (WY - Free Report) . While Boise Cascade sports a Zacks Rank #1, both Potlatch Corporation and Weyerhaeuser carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Boise Cascade’s financial performance has been impressive, with an average positive earnings surprise of 114.74% for the last four quarters. Also, earnings estimates for 2017 and 2018 have been revised upward, over the last 60 days.
Potlatch Corporation pulled off an average positive earnings surprise of 42.59%. Its earnings estimates for 2017 and 2018 have been revised upward, over the last 60 days.
Weyerhaeuser Company delivered an earnings surprise of 22.22% in the last quarter. Its earnings estimates for 2017 and 2018 have been revised upward, over the last 60 days.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>