Want to see TSE:SJ full AI Analyst Report?
Top Page
Stella-Jones
(TSX:SJ)
Select Model
Select Model
Rating:67Neutral
Price Target:
C$75.00
▲(8.63% Upside)
Action:Downgraded
Date:08/10/26
The score is driven primarily by healthy fundamentals (strong TTM growth, solid profitability, and robust free cash flow) tempered by margin compression and leverage considerations. Technical signals are notably weak (below major moving averages and negative MACD), which drags the overall rating. Valuation is reasonable and the latest earnings call supports a cautiously constructive outlook with expected second-half margin improvement, but with near-term execution and cost-recovery risks.
Positive Factors
Strong Revenue Growth
Strong TTM revenue growth shows continued demand across the company’s treated-wood infrastructure businesses. Combined with healthy operating margins, this scale supports reinvestment, strengthens customer coverage, and provides a durable base for earnings over the next several quarters.
Negative Factors
Margin Compression
Profitability has weakened despite strong revenue, with gross, net, EBIT, and EBITDA margins below prior periods. Persistent cost pressure or delayed price recovery could reduce operating leverage, constrain earnings growth, and make the margin objective harder to achieve.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Revenue Growth
Strong TTM revenue growth shows continued demand across the company’s treated-wood infrastructure businesses. Combined with healthy operating margins, this scale supports reinvestment, strengthens customer coverage, and provides a durable base for earnings over the next several quarters.
Read all positive factors
Stella-Jones (SJ) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$3.75B
Dividend Yield1.93%
Average Volume (3M)176.61K
Price to Earnings (P/E)14.6
Beta (1Y)0.32
Revenue Growth1.91%
EPS Growth-20.39%
CountryCA
Employees3,200
SectorBasic Materials
Sector Strength58
IndustryPaper, Lumber & Forest Products
Share Statistics
EPS (TTM)4.72
Shares Outstanding54,567,627
10 Day Avg. Volume162,339
30 Day Avg. Volume176,611
Financial Highlights & Ratios
PEG Ratio1.84
Price to Book (P/B)2.31
Price to Sales (P/S)1.35
P/FCF Ratio10.37
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$86.50Price Target Upside25.29% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
EPS Forecast (FY)5.06
Revenue Forecast (FY)C$3.61B
Stella-Jones Business Overview & Revenue Model
Company Description
Stella-Jones Inc., established in 1992 and headquartered in Saint-Laurent, Canada, is a key manufacturer and distributor of pressure-treated wood products throughout Canada and the United States. The company supplies railway ties and timbers to ra...
How the Company Makes Money
Stella-Jones makes money primarily by manufacturing (pressure-treating) and selling treated wood products to infrastructure customers, with revenue largely generated from product sales rather than subscription or usage-based fees. Its key revenue ...
Stella-Jones Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 11, 2026
Earnings Call Sentiment Neutral
The call presented a balanced view: top-line resilience, strong cash generation, strategic capacity expansions (steel structures) and successful integration of the crossarm acquisition are clear positives. However, Q2 profitability was meaningfully affected by one-time tie charges, site-specific environmental and maintenance costs, temporary steel-structure inefficiencies and fuel-price pressure that reduced adjusted EBITDA and compressed margins. Management expects these headwinds to ease, believes margins (excluding nonrecurring items) would have been near 17.5%, and maintains its medium-term margin target, resulting in a cautiously optimistic outlook but with noted near-term execution and cost-recovery risks.Positive Updates
Modest Revenue Growth
Second quarter sales of $1.042 billion, up $8 million year-over-year; year-to-date sales $1.833 billion, up $26 million versus prior year.
Negative Updates
Quarterly Profitability Decline
Adjusted EBITDA declined to $167 million (16%) in Q2 from $189 million (18%) a year earlier — a 2 percentage point margin contraction driven by several near-term cost headwinds.
Read all updates
Q2-2026 Updates
Positive
Negative
Modest Revenue Growth
Second quarter sales of $1.042 billion, up $8 million year-over-year; year-to-date sales $1.833 billion, up $26 million versus prior year.
Read all positive updates
Company Guidance
Management reiterated that adjusted EBITDA margin should improve in the second half of 2026 but will likely remain below its 3‑year average adjusted EBITDA margin objective of 17.5%–18.5% for the full year; Q2 adjusted EBITDA was $167M (16%) versus $189M (18%) a year ago, and management said excluding non‑recurring items Q2 margin would have been closer to 17.5%. Key operational guidance and targets include mid‑single‑digit organic volume growth for wood utility poles for the year (Q2 organic pole sales +1%, volumes +2%, pricing -1%; YTD pole sales organic +4%), utility product sales of $510M in Q2 and $979M YTD, and an expected ~ $10–12M of incremental annual profitability from pole network optimization. For railway ties, Q2 sales were $235M (volumes -1%), YTD sales $433M (down ~2% ex‑FX), the company took $32M of one‑time charges (including $24M noncash write‑downs) and expects $10–15M of annual run‑rate savings beginning in 2027 with TSO volumes potentially reaching 5%–10% of tie sales; residential lumber full‑year sales are still expected in the $600M–$650M range. Capacity and cash guidance: Candiac steel capacity to double to 20,000 tons by Q3 2026 (full ramp by year‑end) with ~1/3 of that capacity contracted for ~10 years, Fayetteville investment ≈US$50M to add 20,000 tons (commission late‑2027, full production by end‑2028), Q2 cash from operations $192M (vs $224M prior year), H1 net debt reduced by >$100M ex‑FX, available liquidity $759M and leverage ~2.5x.Stella-Jones Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
73
Positive
Cash Flow
70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.52B | 3.49B | 3.47B | 3.32B | 3.06B | 2.75B |
| Gross Profit | 652.00M | 689.00M | 724.00M | 688.00M | 524.00M | 456.00M |
| EBITDA | 598.00M | 661.00M | 633.00M | 608.00M | 448.00M | 400.00M |
| Net Income | 259.00M | 337.00M | 319.00M | 326.00M | 241.00M | 227.00M |
Balance Sheet | ||||||
| Total Assets | 4.29B | 4.12B | 4.10B | 3.71B | 3.07B | 2.67B |
| Cash, Cash Equivalents and Short-Term Investments | 138.00M | 44.00M | 50.00M | 0.00 | -167.00M | -144.00M |
| Total Debt | 1.65B | 1.64B | 1.70B | 1.61B | 1.11B | 878.00M |
| Total Liabilities | 2.11B | 2.08B | 2.16B | 2.06B | 1.52B | 1.22B |
| Stockholders Equity | 2.18B | 2.04B | 1.94B | 1.65B | 1.56B | 1.45B |
Cash Flow | ||||||
| Free Cash Flow | 493.00M | 454.00M | 265.00M | -58.00M | 147.00M | 187.00M |
| Operating Cash Flow | 588.00M | 557.00M | 408.00M | 107.00M | 255.00M | 251.00M |
| Investing Cash Flow | -314.00M | -337.00M | -137.00M | -258.00M | -154.00M | -193.00M |
| Financing Cash Flow | -210.00M | -226.00M | -221.00M | 151.00M | -101.00M | -58.00M |
Stella-Jones Technical Analysis
Negative
69.04
Price Trends
75.44
Negative
77.15
Negative
83.28
Negative
Market Momentum
-2.20
Positive
34.10
Neutral
20.22
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SJ, the sentiment is Negative. The current price of 69.04 is below the 20-day moving average (MA) of 71.34, below the 50-day MA of 75.44, and below the 200-day MA of 83.28, indicating a bearish trend. The MACD of -2.20 indicates Positive momentum. The RSI at 34.10 is Neutral, neither overbought nor oversold. The STOCH value of 20.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:SJ.
Stella-Jones Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | C$320.26M | 6.64 | 13.35% | 6.74% | -5.88% | 225.50% | |
67 Neutral | C$3.75B | 14.57 | 12.35% | 1.93% | 1.91% | -20.39% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
58 Neutral | C$901.01M | -2.04 | -30.64% | 6.38% | -7.37% | -92.84% | |
56 Neutral | C$182.55M | -2.16 | -17.78% | 5.53% | -18.00% | -290.71% | |
50 Neutral | C$7.45B | -3.61 | -24.96% | 1.87% | -11.06% | -888.45% | |
50 Neutral | C$1.69B | -2.57 | -25.37% | ― | 2.69% | -2.51% |
* Basic Materials Sector Average
TSE:SJ
Stella-Jones
68.77
-10.34
-13.07%
TSE:WFG
West Fraser Timber Co
95.08
-8.00
-7.76%
TSE:ADN
Acadian Timber
17.20
0.85
5.18%
TSE:WEF
Western Forest Prod
17.29
4.89
39.44%
TSE:IFP
Interfor
13.70
0.34
2.54%
TSE:CFP
Canfor
14.40
0.58
4.20%
Stella-Jones Corporate Events
Business Operations and StrategyFinancial Disclosures
Stella-Jones Margins Squeezed by Optimization Costs Despite Utility Products Strength
Negative
Aug 6, 2026
Stella-Jones reported second-quarter 2026 sales of $1.042 billion, slightly above the prior year, driven by strong utility products demand and contributions from the Brooks Manufacturing acquisition, despite weaker residential lumber pricing and s...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.