West Fraser Timber upgraded to Outperformer from Neutral at CIBC

CIBC analyst Hamir Patel upgraded West Fraser Timber to Outperformer from Neutral with a C$130 price target. The firm says that with housing affordability improving and a "significant removal" of British Columbia lumber industry capacity from Canfor, it is upgrading the three major lumber companies to Outperformer. When CIBC moved to the sidelines on the group on October 3, 2022, it pointed to significant downside risk to estimates, but since then, mortgage rates have pulled back, consensus EBITDA estimates for 2023 have declined by 45%, and the shares have underperformed, the analyst tells investors in a research note. While the firm still believes sell-side consensus estimates are overly optimistic for 2023 and 2024, it expects the improving housing affordability narrative and supply shuts to drive the stocks higher.