Louisiana-Pacific (NYSE:LPX) Q3 2020 Earnings Prep

in EARNINGS/INVESTING IDEAS by

Louisiana-Pacific Corporation (NYSE:LPX) is scheduled to report Q3 earnings results on November 3, 2020.

The company is expected to report earnings of $1.45/share on revenue of $753.1 million. The consensus earnings per share (EPS) of $1.45/share is based on a poll of 9 analysts and represents a growth in eps of 1,711.1% over the same quarter last year, when the company reported earnings of $0.08/share.

The revenue forecast of $753.1 million based on a poll of 7 analysts implies a year-over-year (YoY) growth in revenue of 24.9%. Last year the company reported $603 million in revenue for the quarter.

Expected to report EPS growth of 1,711.1% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $753.12 $603.00 24.9%
EPS $1.45 $0.08 1,711.1%

Earnings Call Trends

Historically, management has exceeded analyst expectations 3 out of the last 8 tracked quarters, and missed expectations 5 quarters.

What are your expectations from Louisiana-Pacific Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.17 $0.43 147.5% Beat
Q1, 2020 $0.30 $0.34 13.0% Beat
Q4, 2019 $0.12 $0.05 −58.0% Missed
Q3, 2019 $0.20 $0.08 −60.0% Missed
Q2, 2019 $0.23 $0.11 −51.9% Missed
Q1, 2019 $0.14 $0.13 −6.4% Missed
Q4, 2018 $0.26 $0.19 −27.5% Missed
Q3, 2018 $0.68 $0.83 21.4% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −1.8%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 4, 2020 $31.40 $30.85 −1.8% Decline
May 5, 2020 $19.61 $20.32 3.6% Increase
February 11, 2020 $31.88 $33.79 6.0% Increase
November 5, 2019 $29.97 $29.78 −0.6% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.24, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.24 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

Louisiana-Pacific Corporation is currently trading at $28.30/share, down −1.2% for the day. The company is trading at approximately 82.1% of its 52-week high of $34.35/share. The company’s stock price is down −8.3% since the last earnings report and down −10.0% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 32.19 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:LPX Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 186.20 and a forward P/E multiple of 9.01.

Louisiana-Pacific Corporation’s current share price also implies a price-to-book (P/B) multiple of 3.17. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $28.30
P/E Ratio 186.2x
P/E Ratio (Fwd) 9.0x
PEG Ratio −2.1
Total Debt / Total Capital 10.6%
Levered Free Cash Flow $158 million
EV / EBITDA 12.6x

Finbox

Louisiana-Pacific Corporation is a mid-cap stock with a market capitalization of $3.216 billion and a total enterprise value of $3.349 billion. The company operates in the Materials sector and the Paper & Forest Products industry.

Louisiana-Pacific Corporation, together with its subsidiaries, manufactures building products primarily for use in new home construction, repair and remodeling, and outdoor structure markets. It operates through four segments: Siding; North America Oriented Strand Board (OSB); Engineered Wood Products; and South America. The Siding segment offers siding products and related accessories, such as wood-based siding, trim, soffit, and fascia products; and CanExel siding and accessory products, including pre-finished lap and trim products, as well as outdoor building solutions. The OSB segment manufactures and distributes structural panel products comprising OSBs, TechShield radiant barriers, TopNotch sub-floorings, Legacy super tough products, moisture-resistant sub-floorings, and FlameBlock fire-rated sheathing products. The Engineered Wood Products segment provides laminated veneer lumber, laminated strand lumber, and other related products; and I-joists, which are primarily used in residential and commercial floorings, roofing systems, and other structural applications. The South America segment manufactures and distributes OSB and siding products. This segment also distributes and sells related products to augment the transition to wood frame construction. The company also offers timber and timberlands, as well as other products and services. Louisiana-Pacific Corporation sells its products, primarily to retail home centers, wholesalers, distributors, and homebuilding and industrial businesses in North America and South America, as well as in Asia, Australia, and Europe. The company was founded in 1973 and is headquartered in Nashville, Tennessee.

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