) with buy.
Analyst David Martin says the reasons to own any wood products stock include cyclical leverage, restructuring, or the fact it may be an acquisition candidate -- all 3 reasons are present in Louisiana-Pacific. He expects the company to effectively eliminate debt by yearend, thanks to improved cash flow and $400 million of asset sales.
Martin says consolidation, increased capital discipline, and further penetration of oriented strand board should help the pricing environment. An improved balance sheet and declining product liability issues will likely lead to the reinstatement of a dividend and/or share repurchases. Martin set a $17 target.