Louisiana-Pacific (LPX) Expands Partnership With BlueLinx
Louisiana-Pacific Corporation LPX — commonly known as LP Building Solutions ("LP") — extended its distribution partnership with BlueLinx Holdings Inc. BXC.
The expansion includes its Siding Solutions brands and prefinished solutions, namely LP SmartSide Trim & Siding and LP SmartSide ExpertFinish Trim & Siding, in Jacksonville, Tampa and Lakeland in the Southeast region.
Shares of the company have gained 13.6% in the past three months compared with the Zacks Building Products – Wood industry’s 6.2% growth. The trend is likely to continue, given its focus on the Siding business, cost containment efforts and enhancing shareholders’ value.
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LP has been increasing the penetration of Siding products in repair/remodeling and rolling out SmartSide products. It exited the fiber product line to focus on higher-margin SmartSide strand products. The company also launched ExpertFinish within the Prefinish product line.
The company has been witnessing higher-than-expected demand for Smooth SmartSide and ExpertFinish. Also, it recently announced the expansion of Siding Capacity with the production restart at Peace Valley.
In first-quarter 2023, the Siding unit generated flat year-over-year sales. Also, LP invested $114 million in CapEx for converting Sagola to Siding. The company remains committed to growing strand Siding revenues in 2023 and beyond and intends to increase investment in sales and marketing.
Siding is less sensitive to new housing market cyclicality as more than 50% of Siding Solutions demand comes from other markets like sheds and repair and remodeling. The company believes that long-term market trends and demographics indicate continued growth in demand for sustainable engineered wood siding in these markets.
Zacks Rank
LP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
About BlueLinx
BlueLinx is the largest wholesale distributor of residential and commercial building products in the United States.
BXC’s expected earnings growth rate for 2023 is negative 66.1%. Nonetheless, the same for 2024 is 28.3% year over year. The average earnings surprise of BXC for the past four quarters is 9.2%.
Stocks to Consider
Some better-ranked stocks that warrant a look in the Zacks Construction sector are Willdan Group, Inc. WLDN and Sterling Infrastructure, Inc. STRL.
Willdan Group is a nationwide provider of professional, technical and consulting services to utilities, government agencies and private industry.
Willdan Group presently sports a Zacks Rank #1. WLDN’s expected earnings growth rate for 2023 is 39.8%.
Sterling Infrastructure, currently carrying a Zacks Rank #2 (Buy), provides transportation, e-infrastructure and building solutions.
STRL’s expected earnings growth rate for 2023 is 11.4%.
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Louisiana-Pacific Corporation (LPX) : Free Stock Analysis Report
BlueLinx Holdings Inc. (BXC) : Free Stock Analysis Report
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