January 4th, 2018

James Armstrong

W: 917.410.7046

C: 614.353.7373

Companies Detailed

Louisiana-Pacific Corporation (LPX)

Rating: Buy
Target: $32.00
Last Close (1/3/2018): $27.60
Market Capitlization: $3,998 Million
Average Volume: 1,678 k

Norbord Inc. (OSB-TSE)

Rating: Buy
Target: $51.00
Last Close (1/3/2018): $43.69
Market Capitlization: $3,775 Million
Average Volume: 270 k

Oriented Strand Board

Even With Precipitous Fall in November, OSB Prices Beat Expectations

North Central OSB Averages $379 in 4Q – Cleaning up our models before earnings, we find that even though OSB prices fell like a rock in November as the industry caught up with hurricane demand, prices for North Central 7/16-inch OSB still came in $31 higher than we had previously anticipated. Furthermore, prices started out high and fell during the quarter, meaning that the lag effect that most producers experienced in the third quarter should reverse in the fourth.

Raising 4Q and 2017 Estimates for Norbord and Louisiana Pacific – Because of the better than anticipated pricing, we are raising our fourth quarter forecast on Louisiana-Pacific by 10-cents to $0.62. Furthermore, we are raising our Norbord forecast by 30-cents to $1.23. However, only 10-cents of our 30-cent increase in Norbord is due to higher OSB prices. 5-cents of the remaining are due to better margin assumptions from the company’s European business and 15-cents are due to a lower than previously modeled tax rate.


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CS – Coverage Suspended. Armstrong Investment Research L.L.C. has suspended coverage of this company.

NC – Not covered. Armstrong Investment Research L.L.C. does not cover this company.

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Notes: Each box in the Rating and Price Target History chart above represents actions over the past three years in which an analyst initiated on a company, made a change to the rating or price target of a company or discontinued coverage of a company.


I: Initiating Coverage

D: Dropping Coverage

B: Buy

H: Hold

S: Sell

NR: Not Rated

CS: Coverage Suspended

NC: Not Covered

N/A: Not Applicable

Distribution of Ratings (As of 1/2/2018)

Coverage Universe

Rating   Count     Percent

Buy        6              40%

Hold       8              53%

Sell         1              7%

Investment Banking Clients Past 12 Months

Rating   Count     Percent

Buy        0              N/A

Hold       0              N/A

Sell         0              N/A

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