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Louisiana-Pacific (LPX) Soars to 52-Week High, Time to Cash Out?
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Shares of LouisianaPacific (LPX - Free Report) have been strong performers lately, with the stock up 15.5% over the past month. The stock hit a new 52-week high of $64.22 in the previous session. LouisianaPacific has gained 69.3% since the start of the year compared to the 19.3% move for the Zacks Construction sector and the 21.6% return for the Zacks Building Products - Wood industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 16, 2021, Louisiana-Pacific reported EPS of $2.01 versus consensus estimate of $1.84 while it beat the consensus revenue estimate by 8.86%.
For the current fiscal year, Louisiana-Pacific is expected to post earnings of $7.27 per share on $3.22 billion in revenues. This represents a 68.68% change in EPS on a 15.53% change in revenues.
Valuation Metrics
Louisiana-Pacific may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Louisiana-Pacific has a Value Score of B. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 8.7X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 11.7X versus its peer group's average of 14.6X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Louisiana-Pacific currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Louisiana-Pacific meets the list of requirements. Thus, it seems as though Louisiana-Pacific shares could still be poised for more gains ahead.
How Does Louisiana-Pacific Stack Up to the Competition?
Shares of Louisiana-Pacific have been rising, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also looking good, including Boise Cascade, L.L.C. (BCC - Free Report) , UFP Industries (UFPI - Free Report) , and Martin Marietta Materials (MLM - Free Report) , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 5% of all the industries we have in our universe, so it looks like there are some nice tailwinds for Louisiana-Pacific, even beyond its own solid fundamental situation.
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Louisiana-Pacific (LPX) Soars to 52-Week High, Time to Cash Out?
Shares of LouisianaPacific (LPX - Free Report) have been strong performers lately, with the stock up 15.5% over the past month. The stock hit a new 52-week high of $64.22 in the previous session. LouisianaPacific has gained 69.3% since the start of the year compared to the 19.3% move for the Zacks Construction sector and the 21.6% return for the Zacks Building Products - Wood industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 16, 2021, Louisiana-Pacific reported EPS of $2.01 versus consensus estimate of $1.84 while it beat the consensus revenue estimate by 8.86%.
For the current fiscal year, Louisiana-Pacific is expected to post earnings of $7.27 per share on $3.22 billion in revenues. This represents a 68.68% change in EPS on a 15.53% change in revenues.
Valuation Metrics
Louisiana-Pacific may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Louisiana-Pacific has a Value Score of B. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 8.7X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 11.7X versus its peer group's average of 14.6X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Louisiana-Pacific currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Louisiana-Pacific meets the list of requirements. Thus, it seems as though Louisiana-Pacific shares could still be poised for more gains ahead.
How Does Louisiana-Pacific Stack Up to the Competition?
Shares of Louisiana-Pacific have been rising, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also looking good, including Boise Cascade, L.L.C. (BCC - Free Report) , UFP Industries (UFPI - Free Report) , and Martin Marietta Materials (MLM - Free Report) , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 5% of all the industries we have in our universe, so it looks like there are some nice tailwinds for Louisiana-Pacific, even beyond its own solid fundamental situation.