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West Fraser Timber Q4 Misses Estimates

West Fraser Timber Co (TSE: WFG) (NYSE: WFG) posted lower sequential revenues and profits in Q4 2021 and failed to beat analysts’ estimates.

The Vancouver-based forestry company’s addition of Norbord during the COVID-19 pandemic contributed to earnings.

Sales & Earnings

Sales came in at $2.038 billion in Q4 2021, down from $2.358 billion in Q3 2021.

West Fraser earned $334 million ($3.13 per diluted share) for the three months ended December 31, down from $460 million ($4.20 per diluted share) in the prior quarter.

The company was expected to earn $3.59 per share on revenue of $2.08 billion, according to data firm Refinitiv.

CEO Commentary

West Fraser president and CEO Ray Ferris said, “Despite a number of challenges, we posted record earnings in 2021 and another strong result in the fourth quarter. In particular, we managed the complexities of significant transportation and mill disruptions in the face of unprecedented flooding in the B.C. Interior and Vancouver Lower Mainland, which severely disrupted transportation and logistics and the flow to markets of our finished products from Western Canada. The benefits of our product and geographic diversification were evident in the fourth quarter as quarter-over-quarter Adjusted EBITDA improvement from our Lumber business helped to offset declines in our North America and Europe Engineered Wood Products segments.”

Wall Street’s Take

Overall, consensus on the Street is that WFG is a Strong Buy based on four Buys. The average West Fraser Timber Co price target of C$151.14 implies upside potential 20.9% to current levels.

TipRanks’ Smart Score 

West Fraser scores an 8 out of 10 on the TipRanks Smart Score rating system, indicating that the stock should beat the overall market.    

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