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West Fraser Timber Co
(TSX:WFG)
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Rating:58Neutral
Price Target:
C$104.00
▲(8.88% Upside)
Action:Reiterated
Date:08/03/26
The score is driven primarily by pressured current fundamentals (negative TTM profitability and cash burn) offset by a strong, low-leverage balance sheet. The earnings call adds support due to improving sequential profitability and strong cash generation/liquidity, while technicals are cautious given the stock trading below short-term moving averages. Valuation is mixed: a modest dividend helps, but the negative P/E reflects ongoing losses.
Positive Factors
Balance-sheet strength & liquidity
Very low leverage and ~ $1B of liquidity provide durable financial flexibility. This capitalization supports continued capex (guidance $300–$350M), enables weathering cyclical demand troughs, funds mill ramp-ups and optionality on tariffs or working-capital stress over the next several quarters.
Negative Factors
Cyclical losses and cash burn
The recent shift to negative margins and meaningful free-cash-flow deficits increases dependence on a cyclical recovery to restore profitability. Persistent cash burn can constrain discretionary investments, lengthen payback on capex, and raise execution risk if housing demand remains weak over coming quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance-sheet strength & liquidity
Very low leverage and ~ $1B of liquidity provide durable financial flexibility. This capitalization supports continued capex (guidance $300–$350M), enables weathering cyclical demand troughs, funds mill ramp-ups and optionality on tariffs or working-capital stress over the next several quarters.
Read all positive factors
West Fraser Timber Co (WFG) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$7.45B
Dividend Yield1.88%
Average Volume (3M)155.78K
Price to Earnings (P/E)―
Beta (1Y)1.08
Revenue Growth-11.06%
EPS Growth-888.45%
CountryCA
Employees9,600
SectorBasic Materials
Sector Strength58
IndustryPaper, Lumber & Forest Products
Share Statistics
EPS (TTM)-19.05
Shares Outstanding76,022,350
10 Day Avg. Volume162,054
30 Day Avg. Volume155,778
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)1.13
Price to Sales (P/S)1.21
P/FCF Ratio-21.05
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$116.53Price Target Upside21.99% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)-3.89
Revenue Forecast (FY)C$5.62B
West Fraser Timber Co Business Overview & Revenue Model
Company Description
West Fraser Timber Co. Ltd., a diversified leader in the wood products sector, is actively involved in the creation, commercialization, and distribution of an extensive range of goods. Its comprehensive portfolio encompasses lumber, advanced engin...
How the Company Makes Money
West Fraser primarily makes money by manufacturing wood-based building products and selling them to wholesalers, retailers, distributors, and industrial/construction customers. Its main revenue streams are: (1) Lumber sales: The company converts l...
West Fraser Timber Co Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 28, 2026
Earnings Call Sentiment Positive
The call presented a constructive operational and financial picture: consolidated sales increased sequentially and adjusted EBITDA swung positive with all three reportable segments profitable. Management emphasized successful ramp-ups (notably Henderson), Canadian production recovery, strong cash generation ($192M) and a fortified balance sheet (~$1B liquidity, net debt-to-capital ~5%). Key challenges include trade tariff uncertainty (notably potential 50% tariffs on some products), resin/wax and freight inflation (~$13M quarter-over-quarter resin/wax headwind), transportation constraints, NRV/inventory impacts and demand uncertainty from elevated mortgage rates. On balance, positives (profitability recovery, operational improvements, liquidity and cost reductions) materially outweigh the headwinds, though trade and input-cost risks warrant monitoring.Positive Updates
Consolidated Revenue and EBITDA Improvement
Q2 sales approximately $1.4 billion (up from ~$1.3 billion in Q1) with adjusted EBITDA of $59 million in Q2 versus reported adjusted EBITDA of negative $66 million in Q1 (Q1 included a $114 million noncash duty adjustment). Adjusted EBITDA margin ~4% in Q2.
Negative Updates
Tariff and Trade Uncertainty
50% tariff announcements under Section 338 create exposure risks: year-to-date ~3% of Canadian plywood shipments and ~20% of LVL shipments exported to the U.S.; management is assessing direct and indirect effects on downstream customers and end markets.
Read all updates
Q2-2026 Updates
Positive
Negative
Consolidated Revenue and EBITDA Improvement
Q2 sales approximately $1.4 billion (up from ~$1.3 billion in Q1) with adjusted EBITDA of $59 million in Q2 versus reported adjusted EBITDA of negative $66 million in Q1 (Q1 included a $114 million noncash duty adjustment). Adjusted EBITDA margin ~4% in Q2.
Read all positive updates
Company Guidance
On guidance, management kept shipment guidance unchanged and reiterated 2026 capital spending of $300–$350 million, expects duty rates to fall when the AR7 review takes effect later this year, and anticipates further production gains and lower unit costs as Henderson (Q2 production >2x Q1) continues to ramp and Bemidji ramps early next year; they quantified current performance—Q2 sales ≈ $1.4 billion, adjusted EBITDA $59 million (~4% margin) with segment EBITDA of Lumber $41M, North America EWP $13M, Europe $13M and Other −$8M, including a $13M favorable duty adjustment in Q2 (Q1 had a $114M non‑cash adjustment); key operating and balance‑sheet metrics: cash from operations $192M, $148M repayment of operating borrowings, net debt down $140M, $55M drawn on a $1B revolver, liquidity ≈ $1B and net debt‑to‑capital ~5%; sensitivities: a $10 change in crude oil ≈ $15M annual impact on resin/wax and Q2 resin/wax costs rose ≈ $13M vs Q1; no share repurchases in Q2 as they preserve financial flexibility.West Fraser Timber Co Financial Statement Overview
Summary
Income Statement
22
Negative
Balance Sheet
78
Positive
Cash Flow
30
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.60B | 5.46B | 8.46B | 6.44B | 9.79B | 10.43B |
| Gross Profit | 221.25M | 1.28B | 653.47M | 1.76B | 4.60B | 5.82B |
| EBITDA | -1.09B | -608.00M | 828.92M | 534.72M | 3.23B | 4.48B |
| Net Income | -1.48B | -937.00M | -6.85M | -166.60M | 1.99B | 2.92B |
Balance Sheet | ||||||
| Total Assets | 7.42B | 7.62B | 8.75B | 9.35B | 10.07B | 10.33B |
| Cash, Cash Equivalents and Short-Term Investments | 73.88M | 202.00M | 640.62M | 893.53M | 1.17B | 1.55B |
| Total Debt | 379.38M | 333.00M | 228.86M | 534.13M | 541.26M | 522.04M |
| Total Liabilities | 1.87B | 1.77B | 1.80B | 2.18B | 2.38B | 2.75B |
| Stockholders Equity | 5.56B | 5.85B | 6.95B | 7.17B | 7.69B | 7.58B |
Cash Flow | ||||||
| Free Cash Flow | -493.79M | -315.00M | 180.88M | 72.15M | 1.67B | 2.83B |
| Operating Cash Flow | -109.87M | 96.00M | 644.49M | 556.89M | 2.14B | 3.46B |
| Investing Cash Flow | -349.56M | -380.00M | -343.67M | -586.36M | -461.83M | -281.20M |
| Financing Cash Flow | -111.25M | -167.00M | -528.35M | -247.96M | -2.04B | -2.09B |
West Fraser Timber Co Technical Analysis
Positive
95.52
Price Trends
95.84
Negative
92.66
Positive
90.85
Positive
Market Momentum
-0.65
Positive
50.08
Neutral
37.31
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:WFG, the sentiment is Positive. The current price of 95.52 is below the 20-day moving average (MA) of 95.55, below the 50-day MA of 95.84, and above the 200-day MA of 90.85, indicating a neutral trend. The MACD of -0.65 indicates Positive momentum. The RSI at 50.08 is Neutral, neither overbought nor oversold. The STOCH value of 37.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:WFG.
West Fraser Timber Co Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | C$320.26M | 6.50 | 13.35% | 6.88% | -5.88% | 225.50% | |
62 Neutral | C$3.75B | 14.45 | 12.35% | 1.95% | 1.91% | -20.39% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
58 Neutral | C$7.45B | -3.59 | -24.96% | 1.88% | -11.06% | -888.45% | |
58 Neutral | C$901.01M | -2.06 | -30.64% | 6.38% | -7.37% | -92.84% | |
50 Neutral | C$1.69B | -2.59 | -25.37% | ― | 2.69% | -2.51% | |
45 Neutral | C$182.55M | -2.12 | -17.78% | 5.53% | -18.00% | -290.71% |
* Basic Materials Sector Average
TSE:WFG
West Fraser Timber Co
94.33
-6.48
-6.43%
TSE:ADN
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TSE:WEF
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16.95
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TSE:SJ
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-12.25%
TSE:IFP
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13.84
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6.30%
TSE:CFP
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14.52
0.98
7.24%
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.