Louisiana-Pacific Earnings: Siding and OSB Continue to Grow Despite a Challenging Market

No-moat Louisiana-Pacific reported strong second-quarter results that were ahead of our expectations. Net sales climbed 33% year over year as the siding solutions and oriented strand board segments experienced robust growth. Louisiana-Pacific has capitalized on growth in new single-family construction and has won market share with builders for its engineered wood siding products. OSB has also experienced favorable dynamics as price growth has remained robust through the first half of the year. That said, OSB prices have begun to decline, adding some uncertainty to Louisiana-Pacific’s results in the second half of the year. Nevertheless, we've increased our fair value estimate to $65 per share from $62 due to higher near-term revenue in our forecast.