Louisiana-Pacific Earnings: New Residential Construction Drives Robust OSB Demand; Shares Expensive

No-moat Louisiana-Pacific started the year on solid footing with impressive first-quarter results. Net sales soared over 24% year over year on strong performance from the oriented strand board and siding solutions businesses. While housing markets have been largely stagnant, demand for new single-family housing construction has driven robust growth for OSB and siding. We forecast single-family housing starts will grow around 4% in 2024, which should drive demand for OSB and siding, benefiting much of Louisiana-Pacific’s business. We've increased our fair value estimate to $62 per share from $54 due to higher near-term revenue and profitability in our forecast.