LOUISIANA-PACIFIC CORPORATION (LPX): what the price assumes

Generated: 2026-07-29 · Exported: 2026-08-01 · Source: https://boothcheck.com/report/LPX

Headline

Field	Value
Ticker	LPX
Company	LOUISIANA-PACIFIC CORPORATION
Current price	$74.36/sh
Composition	Siding 62% / Siding - Other 0% / OSB - Structural Solutions 17% / OSB - Commodity 13% / OSB - Other 0% / Other 7%

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

Field	Value
Inversion basis	whole-company
Operating margin (value-band context)	4.6%
Operating margin today	4.8%
Margin compression (value-band)	-0.2pp
Must persist for	13.6y
Multiple paid	44x operating income

The operating-margin figure is value-band context at year 10: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 11.5% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~2.2 years.

Reconcile: at the x-ray's 9.3% required return this reads ~8.9 years; the models below use their own rates.

How unusual the bet is: high

Reference	Value
vs own history	+0.14σ
cohort percentile (of 80 peers)	94
sustained it ~10 years at this level	14%
implied end-window share	0%

Valuation X-Ray

Every valuation family lands below the price. The price therefore sits beyond what those standard frames encode.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Family	Median price/FV	Models	Reads
Asset	8.74x	5	expensive
Earnings	3.27x	2	expensive
Relative	1.67x	3	expensive
Growth	1.81x	2	expensive

Families that call it expensive: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.7%); the inversion above states its own rate.

Per-Model Detail (n=12)

Model	Family	FV	Price/FV	Applicable	Methodology
DCF Perpetual Growth	Growth	$42.11	1.77x	yes	Reference only (OCF-based, capex excluded): OCF $0.3B
DCF Exit Multiple	Growth	$0.00	—	no	Negative/zero FCF or EBITDA — equity value floored at $0
Relative Valuation	Relative	$44.44	1.67x	yes	P/E 31.64x (blended: static sector reference 18x + trailing (TTM) 63x), scenarios: 26.9x / 31.6x / 36.4x (bear / base = reference held flat / bull), EV/EBITDA 14.56x
Simple DDM	Growth	—	—	no	—
Two-Stage DDM	Growth	—	—	no	—
Simple Excess Return	Asset	$12.66	5.87x	yes	BV/sh $24.71, ROE (TTM) 4.7%, ke 9.3%
Two-Stage Excess Return	Asset	$8.51	8.74x	yes	5yr excess ROE then converge to ke=9.3%
Discounted Future Market Cap	Growth	$40.14	1.85x	yes	Rev $2.6B, growth -13% (input: historical growth; tapered), Terminal P/S: 1.7x / 2.0x / 2.3x (bear / base = today's held flat / bull, cap 8x)
Growth-Adjusted P/E	Relative	—	—	no	—
Margin Trajectory	Growth	—	—	no	—
Earnings Power Value	Earnings	$113.97	0.65x	yes	Normalized EBIT (5y avg op income, one-time charges added back) $0.74B × (1−25%) / WACC 8.7% → EPV (no growth)
Residual Income	Asset	$7.81	9.52x	yes	BV $24.71 + 5yr PV of (ROE (TTM) 4.7% − Kₑ 9.3%) × BV; BV grows 3.1%/yr
Graham Number	Asset	$25.51	2.92x	yes	√(22.5 × EPS $1.17 × BVPS $24.71) — Graham's conservative floor
EV/EBITDA Relative	Relative	$42.20	1.76x	yes	EBITDA $0.26B × sector EV/EBITDA 12.0x
FCF Yield	Earnings	—	—	no	—
SBC-Adj FCF Yield	Earnings	—	—	no	—
Ben Graham Formula	Earnings	$0.98	75.88x	yes	EPS $1.17 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median)
ROIC-Justified P/B	Asset	$3.74	19.88x	yes	BV $24.71 × (ROIC 1.3% / WACC 8.7%)
P/Sales Sector	Relative	$91.36	0.81x	yes	Revenue $2.56B × sector P/S 2.5x
PEG Fair Value	Relative	—	—	no	—
Earnings Yield	Earnings	$12.65	5.88x	yes	EPS $1.17 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations Multiple	Relative	—	—	no	—
Clinical Phase NPV	Growth	—	—	no	—
Merton	Asset	—	—	no	—
V5 Mechanical	—	—	—	no	—

Solvency

Field	Value
Net debt	$184.0m
Net debt / NOPAT (after-tax)	1.99x
Net debt / operating income (pre-tax)	1.50x
Interest coverage	6.8x
Share count CAGR (buyback)	-5.0%
Burning cash	no

Bullet Takeaways

• Louisiana-Pacific is really two businesses: a higher-margin siding franchise that is 62% of sales and competes on material displacement rather than housing starts, and a commodity OSB segment that swings with the panel-price cycle.
• The biggest risk is the OSB trough deepening: first-quarter OSB sales fell 37% with prices down 21% to 31% and the segment posted negative EBITDA, and management has guided to negative OSB EBITDA for the full year.
• Watch siding volumes and OSB price recovery: siding is guided to $410 to $425 million of EBITDA this year, and the stock's price already credits a housing and OSB recovery that management has tempered for the second half of 2026.

Bull Case

The counterintuitive thing about Louisiana-Pacific is that its largest business does not behave like the commodity producer the ticker suggests. Siding generated $1,689 million in 2025, about 62% of net sales, and the 10-K explains why it is different: the segment is "generally less sensitive to new housing market cyclicality since a majority of its demand comes from other markets, including off-site structure producers and repair and remodel." Its growth depends on "the continued displacement of vinyl, stucco, wood, fiber cement", which is a share-gain story, not a housing-starts story. In the first quarter of 2026, while the rest of the building-products world struggled, siding generated $360 million in sales and $101 million in adjusted EBITDA as higher prices offset softer volumes. That is a high-margin, growing franchise hiding inside a company the market files under commodity wood.

The shape of the business has deliberately shifted toward that franchise. Siding now competes in the same renovation-and-exterior cohort as Fortune Brands, UFP Industries, and Trex, names valued on durable repair-and-remodel demand rather than lumber spot prices. The company has guided full-year siding revenue to $1.64 to $1.66 billion with siding EBITDA of $410 to $425 million, which would be a record-class contribution from a single segment. As siding grows and the cyclical OSB business shrinks as a share of the whole, the consolidated economics drift toward the steadier, higher-margin end.

The balance sheet gives management room to keep playing offense through the cycle. Net debt is only about $184 million, roughly one and a half times operating income, with interest coverage near seven times, so the company is not financing its way through the downturn. The share count has fallen about 5% a year, direct evidence that the cash generated by siding is being returned rather than absorbed by debt service. A normalized view of earnings power, taking the five-year average operating income rather than the depressed trailing quarter, capitalizes to well above the current price, which is the bull's quantitative point: judge LPX on its through-cycle profitability, not on a trough OSB quarter.

Bear Case

The cycle is the whole risk, and right now it is cutting hard against the commodity half of the company. OSB, oriented strand board, is the structural panel business, and in the first quarter of 2026 its net sales fell 37% to $168 million as prices dropped 21% to 31% across product types and volumes fell double digits, producing negative adjusted EBITDA of about $12 million. OSB is a pure commodity: LPX has no pricing power, the product trades on the spot market, and the segment swings from large profits at the top of the cycle to losses at the bottom. The company has explicitly guided to negative OSB EBITDA for the full year. Peak OSB earnings are not sustainable earnings, and a buyer extrapolating the company's recent best years is pricing a cycle position that has already turned.

The stock is expensive on every standard lens against trailing results, and that is the bear's arithmetic. Trailing earnings per share are only $1.17, return on equity is about 4.7%, and the price sits at a large multiple of book value, capitalized earnings, and peer multiples alike. The reason is that the trailing year is a trough, but pricing a cyclical at a trough multiple of trough earnings is a specific bet: that the recovery comes soon and that the next peak matches the last one. Management itself has tempered its full-year guidance, citing "increasing uncertainty in the second half of 2026" driven by falling consumer confidence and elevated interest rates. If housing stays weak into 2027, the OSB drag persists and even the resilient siding business faces volume pressure.

Siding is more defensible than OSB, but it is not immune. Its growth thesis rests on continued displacement of competing exterior materials, and that displacement slows when repair-and-remodel budgets tighten in a high-rate environment. First-quarter siding results already showed higher prices offsetting lower volumes, which is the early signal of demand softening. The balance sheet is genuinely clean, with modest net debt and strong coverage, so solvency is not the concern. The concern is that the market is paying a growth-and-recovery multiple for a company whose commodity segment is losing money and whose growth segment is leaning on price rather than volume, and that the recovery the price assumes arrives later and shallower than hoped.

Valuation

The price is unusual in that no standard valuation family reaches it. Asset value, capitalized earnings, peer multiples, and even forward growth all land below the current level when measured against trailing results. That pattern is the signal: the price is a bet beyond what the static methods support on the trailing year, which makes sense only once you recognize that the trailing year is a cyclical trough. Trailing earnings per share are $1.17 and return on equity is 4.7%, both depressed by the OSB collapse, so methods anchored on those figures will read the stock as very expensive. The honest framing is that the buyer is underwriting a recovery, not paying for current earnings.

The more representative lens for a cyclical is normalized earnings power, and the split between the two halves of the business is the picture. Capitalizing the five-year average operating income, which smooths across the cycle, reaches well above the price, while the trailing-trough methods sit far below it. The resolution is that LPX is two businesses: a siding franchise that earns durable, repair-and-remodel-driven margins and competes with renovation peers, and a commodity OSB business swinging through its cycle. A single consolidated multiple averages those together and misleads in both directions. Siding alone is guided to $410 to $425 million of EBITDA this year against negative OSB EBITDA, so the consolidated figure understates the quality of the part that is growing.

Solvency removes the downside tail. Net debt of about $184 million is roughly one and a half times operating income, interest coverage is near seven times, and the share count is falling about 5% a year as the company returns cash. The business is not burning cash even with OSB in the red, because siding carries the consolidated result. The decisive question for the price is therefore not survival, which is not in doubt, but timing: how long the OSB trough lasts and whether siding's price-led growth holds its volume, because the price already credits the recovery that the trailing numbers have not yet delivered.

Catalysts

First-quarter 2026 results, reported in May, drew the two-segment picture sharply. Net sales fell to $574 million and net income to $27 million, with the company meeting its first-quarter guidance despite weaker housing, softer OSB demand, and commodity price pressure, helped by stronger-than-expected pricing in both segments. Siding delivered $360 million in sales and $101 million in adjusted EBITDA as higher prices offset lower volumes, while OSB sales dropped 37% to $168 million with prices off 21% to 31% and adjusted EBITDA of negative $12 million.

The forward guidance frames the rest of the year. The company expects siding revenue of $1.64 to $1.66 billion and siding EBITDA of $410 to $425 million, with negative OSB EBITDA and consolidated adjusted EBITDA of $345 to $360 million. Management tempered the outlook to reflect increasing uncertainty in the second half, citing falling consumer confidence and elevated interest rates. The catalysts that matter are the direction of OSB panel prices, which determines whether the OSB drag eases, and siding volume trends, since the segment has been leaning on price to hold revenue against softer demand.

Peer Cohorts (Per Segment, With Filing Citations)

Siding (reported)

• JHX (JAMES HARDIE INDUSTRIES PLC)
• (no filing in the citation store)
• TREX (Trex Company, Inc.)
• FY2025 10-K: …sales, as measured by linear feet of lumber. Many of the conventional lumber suppliers with which we compete have established ties to the building and construction industry and have well-accepted products. A majority of the lumber used in wood decks is pressure-treated lumber. Southern yellow pine and fir have a…
• FY2025 10-K: …principal competitive factors in the decking and railing market include product quality, price, aesthetics, maintenance cost, distribution, brand strength, and warranties. We believe we compete favorably with respect to these factors. We believe that our products offer aesthetic and cost advantages over the life of a…
• UFPI (UFP INDUSTRIES, INC.)
• FY2025 10-K: …a more complete solution to our customers' packaging needs and requirements. Over the last several years, we have added additional products and services to this business unit to meet the increasing demand of our customers to provide a wider array of innovative solutions to their packaging and shipping needs. Through…
• FY2025 10-K: …non-residential building, distribution, and infrastructure. Our customers in this business unit include general contractors as well as distributors. We believe we are unique in our ability to deliver highly engineered, factory-built solutions to job sites. 5 Table of Contents We believe the diversification of the end…
• FBIN (Fortune Brands Innovations, Inc.)
• FY2025 10-K: …otherwise have been used in furtherance of our operating business. Further, the indemnities from MasterBrand for our benefit may not be sufficient to protect us against the full amount of such liabilities, and MasterBrand may not be able to fully satisfy its indemnification obligations. Moreover, even if we…
• FY2025 10-K: …The Sidley Opinion also relied on certain facts, assumptions and representations, as described therein, as well as the continued validity of the IRS Ruling. The Sidley Opinion is not binding on the IRS or the courts, and the IRS or the courts may not agree with such opinion. Notwithstanding the IRS Ruling and the…
• OC (Owens Corning)
• FY2025 10-K: Roofing segment are laminate asphalt roofing shingles. Other products include roofing components, composite lumber and oxidized asphalt primarily used in residential construction. Roofing also manufactures and sells glass mat and specialty veil materials used in building and construction applications We have been able…
• FY2025 10-K: 23-01-01 2023-12-31 0001370946 us-gaap:OperatingSegmentsMember srt:NorthAmericaMember us-gaap:CommercialAndIndustrialSectorMember oc:InsulationMember 2023-01-01 2023-12-31 0001370946 us-gaap:OperatingSegmentsMember srt:NorthAmericaMember us-gaap:CommercialAndIndustrialSectorMember oc:DoorsMember 2023-01-01 2023-12-31…
• AMRZ (Amrize Ltd)
• FY2025 10-K: …as well as a variety of downstream products and solutions such as ready- mix concrete, asphalt and other construction materials. • Our Building Envelope segment offers advanced roofing and wall systems, including single-ply membranes, insulation, shingles, sheathing, waterproofing and protective coatings, along with…
• FY2025 10-K: …or pricing pressures from, one or more of our key customers or distributors could adversely affect our financial condition, liquidity and results of operations. We operate in several niche areas within our Building Envelope segment in which a significant portion of our revenues are attributable to a few large…

OSB (reported)

• UFPI (UFP INDUSTRIES, INC.)
• FY2025 10-K: …be realized. In recognition of this risk, we have provided a valuation allowance of $ 3.6 million against the various NOLs. Furthermore, there is a valuation allowance of $ 0.5 million against a capital loss carryforward we have for a wholly-owned subsidiary, UFP Canada, Inc. Based upon the business activity and the…
• FY2025 10-K: …ufpi:RetailSegmentMember ufpi:UfpEdgeMember 2024-12-29 2025-12-27 0000912767 us-gaap:OperatingSegmentsMember ufpi:RetailSegmentMember ufpi:ProwoodMember 2024-12-29 2025-12-27 0000912767 us-gaap:OperatingSegmentsMember ufpi:RetailSegmentMember ufpi:DeckoratorsMember 2024-12-29 2025-12-27 0000912767…
• JHX (JAMES HARDIE INDUSTRIES PLC)
• (no filing in the citation store)
• BLDR (Builders FirstSource, Inc.)
• FY2025 10-K: …spanning all of our product categories. We provide professional installation and turn-key services as a solution for our homebuilder customers. Through our installation services program, we help homebuilders realize efficiencies through improved scheduling, resulting in reduced cycle time and better cost controls. By…
• FY2025 10-K: …costs, and become more competitive. • Lumber and Lumber Sheet Goods. Lumber and lumber sheet goods include dimensional lumber, plywood, and OSB products used in on-site house framing. Our operating results are dependent on the following trends, strategies, events and uncertainties, some of which are beyond our…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

LPX FY2025 10-K · LPX Q1 FY2026 results, May 2026 · LPX FY2026 guidance, May 2026 · LPX Q1 FY2026 earnings call, May 2026