GREY:ANSBF - Post by User
Post by
retiredcfon Aug 16, 2013 9:34am
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Post# 21675687
CIBC
CIBC Typical in these markets, we have a serious negative overreaction. Looks like a good buy at these levels. GLTA
| Ainsworth Lumber Co. Ltd. Lowering OSB Pricing Forecasts, But Maintaining Constructive Outlook |
| We have revised our estimates for Ainsworth, reflecting Q2/13 results and lower OSB pricing assumptions. Our 2013 EPS estimate is reduced to $0.19 (previously at $0.42) and 2014E EPS is reduced to $0.40 (previously at $0.65) and mid-cycle EPS is estimated at $0.45 (unchanged). Our EBITDA for 2013 is revised down to $153.4 million from $189.9 million as we factor in lower OSB prices in H2/2013. Our EBITDA for 2014 is revised down to $203.5 million from $274.1 million. Full output, mid-cycle EBITDA is revised higher to $232.1 million from $214.1 million. Our OSB price expectation is lowered to US$334 per msf (7/16" North Central) for 2013 and US$325 per msf for 2014. Significant quarter-to-quarter swings in OSB pricing can and do occur. We assume that Q1/2013 OSB pricing of US$417 per msf is the highpoint for pricing in 2013/2014. We reiterate our Sector Outperformer rating and our price target is lowered to $4.60 from $4.75. Ainsworth is currently trading at 4.0x EV/EBITDA and 6.7x EPS based on mid-cycle EPS. We expect over the next 18 months ANS will trade closer to its $5.15 NAV |