Banking

Louisiana Pacific Is In Buy Range As Lumber Prices Soar Again

Louisiana Pacific

Louisiana Pacific

LPX


$1.88


2.94%


Louisiana Pacific Is In Buy Range As Lumber Prices Soar Again32%

IBD Stock Analysis

  • Breaks trend line and short-term resistance, offering early entry
  • Relative strength line highest in four months
  • Revenue growth accelerating fast
Louisiana Pacific Is In Buy Range As Lumber Prices Soar Again

Composite Rating

Louisiana Pacific Is In Buy Range As Lumber Prices Soar Again

Industry Group Ranking

Louisiana Pacific Is In Buy Range As Lumber Prices Soar Again

Emerging Pattern

Louisiana Pacific Is In Buy Range As Lumber Prices Soar Again

Consolidation

* Not real-time data. All data shown was captured at
12:50PM EDT on
10/12/2021.

Louisiana-Pacific (LPX) is the IBD Stock Of The Day as lumber prices rise signaling inflation concerns following a bust this summer. LPX stock is rebounding above an early entry.




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Nashville-based Louisiana-Pacific makes wood building products like siding and trim. The stock is linked heavily to the price of lumber.

Lumber has been on a roller-coaster ride during the pandemic. Prices surged this spring amid a homebuilding boom and as homeowners tackled improvement projects. Lumber prices plunged in August as supply increased, but now they are on the rise again.


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LPX Stock

Shares rose 2.9% to 65.76 on the stock market today, hitting an intraday high of 67.49. LPX stock is flashing a buy signal after breaking a trend line in its consolidation. Investors could use Monday’s close of 63.88 as the buy point. Investors also could use 66.15, just above the Aug. 30 high, as a resistance point.

The overall market is in a correction with a rally attempt hitting some resistance. So investors need to be cautious when adding to their portfolios.

However, commodity-related sectors are faring relatively well. Louisiana-Pacific is tied closely to lumber prices, so investors have more flexibility in adding to commodity plays when the commodity price is rising.

The company will release third-quarter results on Nov. 2. FactSet analysts see Louisiana-Pacific earnings soaring 131% to $3.60 per share with revenue up 42% to $1.13 billion. Those would actually mark big slowdowns in growth rates, reflecting tougher year-over-year comparisons.

LPX stock has a 96 Composite Rating out of a best possible 99, and a 98 EPS Rating.

Louisiana-Pacific is the top-ranked stock in IBD’s Building-Wood Products group. Other stocks in the group include Boise Cascade (BCC) and UFP Industries (UFPI).

The Composite Rating compiles scores on key fundamental and technical metrics: earnings and sales growth, profit margins, return on equity, and relative price performance. Investors should focus on stocks with a Composite Rating of 90 or higher.

Follow Gillian Rich on Twitter for investing news and more.

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