UPDATE: Deutsche Bank Downgrades Louisiana-Pacific to Hold; Current Valuation Fair
Deutsche Bank lowered its rating on Louisiana-Pacific (NYSE: LPX) from Buy to Hold but raised its price target from $12 to $14.
Deutsche Bank said, "Based on our analysis of probable mid-cycle EBITDA ($330-340MM) and a 6.5X multiple, we believe that $14 represents reasonable “fair value”. LPX is NA's largest producer of OSB with ~20% mkt share. It's possible to make an argument for a higher valuation based on more disciplined behavior by OSB producers. However, given the disappointing financial record of the OSB industry (including LPX) over time, we believe that investors should take such arguments with a grain of salt. At current levels, we think LPX stock is fairly valued."
Louisiana-Pacific closed at $13.28 on Wednesday.
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Tags: Deutsche Bank