In a report published Thursday, Deutsche Bank analyst Mark Wilde upgraded the rating on Louisiana-Pacific Corporation LPX from Hold to Buy, and raised the price target from $20.00 to $21.00.
In the report, Deutsche Bank noted, “On Wed evening, LP announced that it is acquiring Ainsworth for a total purchase price of US$1.1B. Following GP's acqn of Grant Forests in 2010, this is the second major step in consolidating the OSB industry. In a segment legendary for aggressive & destructive ‘herd behavior', consolidation places latent capacity in a smaller number of hands and reduces the risk of too many players restarting too much capacity too quickly. We would not be surprised to see 1-2 further moves. On its own, this deal looks attractive: ANS has the best margins among peers & gives LPX access to growing Asian mkts, especially Japan. Upgrade from Hold to Buy. Raising PT from $20 to $21.”
Louisiana-Pacific Corporation closed on Wednesday at $15.26.
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