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Why Louisiana-Pacific (LPX) Dipped More Than Broader Market Today

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In the latest close session, Louisiana-Pacific (LPX - Free Report) was down 2.5% at $89.48. This change lagged the S&P 500's daily loss of 0.79%. On the other hand, the Dow registered a loss of 0.94%, and the technology-centric Nasdaq decreased by 0.92%.

Shares of the home construction supplier have appreciated by 0.07% over the course of the past month, underperforming the Construction sector's gain of 5.56%, and the S&P 500's gain of 5.22%.

The investment community will be paying close attention to the earnings performance of Louisiana-Pacific in its upcoming release. The company's upcoming EPS is projected at $1.08, signifying a 48.33% drop compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $747.25 million, down 8.2% from the year-ago period.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $4.24 per share and revenue of $2.93 billion. These totals would mark changes of -27.89% and -0.49%, respectively, from last year.

Investors should also pay attention to any latest changes in analyst estimates for Louisiana-Pacific. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, there's been a 3.31% fall in the Zacks Consensus EPS estimate. Currently, Louisiana-Pacific is carrying a Zacks Rank of #3 (Hold).

Looking at valuation, Louisiana-Pacific is presently trading at a Forward P/E ratio of 21.67. This valuation marks a discount compared to its industry average Forward P/E of 28.22.

It's also important to note that LPX currently trades at a PEG ratio of 1.41. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As of the close of trade yesterday, the Building Products - Wood industry held an average PEG ratio of 2.49.

The Building Products - Wood industry is part of the Construction sector. This industry currently has a Zacks Industry Rank of 90, which puts it in the top 37% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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