Louisiana-Pacific climbs on Ainsworth acquisition, upgrades

|By:, SA News Editor

Louisiana-Pacific (LPX +10.7%) shares climb as investors absorb the company's $1.1B acquisition of Ainsworth Lumber. CEO Curt Stevens characterized the move as a play on the U.S. housing recovery and a chance to gain exposure to Asian markets.

Following the announcement, Deutsche upgraded LPX to Buy with a PT of $21 ($20 previous): "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 ... On its own, this deal looks attractive: ANS has the best margins among peers."

DA Davidson also upgraded the company to Buy.