Louisiana-Pacific Earnings: Weak OSB Pricing and Demand Elevates Near-Term Uncertainty

No-moat Louisiana-Pacific reported first-quarter results that were largely in line with our expectations. Lower wood product prices and moderating demand weighed on the firm, with revenue decreasing 50% year over year. Despite relative strength from the siding business, oriented strand board, or OSB, continued to underperform as prices pushed lower. Louisiana-Pacific reported a $30 million operating profit in the quarter, down significantly from over $550 million a year ago amid lower prices and moderating demand. We've decreased our fair value estimate to $51 from $52 due to our expectation of lower OSB prices through 2023 than we had previously anticipated.