Despite falling short of first-quarter earnings expectations, the stock of wood panel maker Norbord Inc. is poised to rise, according to Desjardins Securities.<\/p>\n
Citing a fortuitous price surge in oriented strand board (OSB) and blaming the Toronto-based company\u2019s underperformance on bad weather, Desjardins analyst Pierre Lacroix pegged Norbord stock at $20.50, up from $17.25, while maintaining a hold rating.<\/p>\n
On Tuesday, Norbord posted first-quarter EBITDA of US$9 million and loss of US12\u00a2 per share, compared with market consensus of US$16-million and EPS of US0\u00a2.<\/p>\n
Mr. Lacroix attributed those results to weather conditions which impaired shipments and raised costs.<\/p>\n
The company should show \u201cmaterial improvement\u201d in the second quarter, he said.<\/p>\n
Since the beginning of April, OSB prices have soared, reaching the highest levels in five years, which the company expects to produce EBITDA of US$17-million in April alone.<\/p>\n
\u201cOver the longer term, management believes prices are not sustainable at these levels, and should decline later this year until a more solid U.S. housing recovery takes place,\u201d Mr. Lacroix said.<\/p>\n
Rising supply should also put downward pressure on prices, he said.
\u201cWe expect volatility will return as soon as pricing pressure resurfaces in the coming weeks.\u201d<\/p>\n
For the time being, Norbord will capitalize on inflated commodity prices, but into 2011, a normalized OSB market will put downward pressure on earnings.
Tim Shufelt
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<\/p>\n","protected":false},"excerpt":{"rendered":"
Despite falling short of first-quarter earnings expectations, the stock of wood panel maker Norbord Inc. is poised to rise, according to Desjardins Securities. Citing a fortuitous price surge in oriented strand board (OSB) and blaming the Toronto-based company\u2019s underperformance on bad weather, Desjardins analyst Pierre Lacroix pegged Norbord stock at $20.50, up from $17.25, while […]<\/p>\n","protected":false},"author":4062,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-546687","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/546687","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4062"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=546687"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/546687\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=546687"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=546687"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=546687"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}