photovs/iStock via Getty Images
Boise Cascade (NYSE:BCC) and Louisiana-Pacific (NYSE:LPX) on Wednesday were upgraded to Buy from a previous investment rating of Hold by analysts at Truist Securities. They said the makers of building products are likely to benefit from a stronger U.S. housing market.
“The U.S. housing market, especially single-family starts, is poised for a recovery,” Michael Roxland, analyst at Truist, said in a June 28 report. “Investors will be best positioned in Boise Cascade (BCC) and Louisiana-Pacific (LPX) given that they are higher beta stocks with greater exposure to single-family home construction.” Beta is a measure of a stock's volatility, or how its price fluctuates in relation to the broader market.
Truist raised its price target on Boise Cascade (BCC) to $100 a share from $66 a share previously, based on a price-to-earnings multiple of 11 times to 12 times EPS in calendar year 2024, an enterprise value-to-EBITDA multiple of 7 times to 8 times and a free cash flow yield of 9% to 10%.
The financial-services firm also raised its price target on Louisiana-Pacific (LPX) to $82 a share from $49, based on a price-to-earnings multiple of 13 times to 14 times EPS in calendar year 2024 and an enterprise value-to-EBITDA multiple of 10 times to 11 times.
Truist maintained a Hold rating on PotlatchDeltic (PCH), Weyerhaeuser (WY) and Rayonier (RYN).