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Canfor Corp. (TSE:CFP)
:CFP
Top Page
Canfor
(OTC:CFP)
58Neutral
Positive Factors
Negative Factors
Cash Flow
Canfor has experienced a significant net cash reduction from C$1.3bn to C$262mm, indicating financial strain.
Export Duties
Higher export duties are likely to pressure Canfor's EBITDA.
Financial Performance
Canfor has generated a significant EBITDA loss in its North American lumber operations.
Canfor (CFP) vs. S&P 500 (SPY)
Market Cap
C$1.65B
Dividend YieldN/A
Average Volume (3M)220.07K
Price to Earnings (P/E)―
Beta (1Y)1.51
Revenue Growth-3.20%
EPS Growth-107.88%
CountryCA
Employees6,634
SectorBasic Materials
Sector Strength52
IndustryPaper, Lumber & Forest Products
Share Statistics
EPS (TTM)-5.64
Shares Outstanding118,405,080
10 Day Avg. Volume225,214
30 Day Avg. Volume220,069
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.35
Price to Cash Flow (P/CF)5.20
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$19.20Price Target Upside38.10% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
Canfor Business Overview & Revenue Model
Company DescriptionCanfor Corporation (CFP) is a leading integrated forest products company based in Canada, primarily engaged in the manufacturing and distribution of wood products. The company operates in the lumber and pulp sectors, offering a diverse range of products including softwood lumber, engineered wood products, and pulp and paper goods. Canfor serves a global customer base, with operations primarily in Canada and the United States, and a strong presence in key international markets.
How the Company Makes MoneyCanfor makes money by manufacturing and selling a variety of wood products, with softwood lumber being its primary revenue stream. The company sources timber from its extensive forest holdings and processes it into high-quality lumber and other wood products. These products are sold to a wide range of customers in construction, housing, and industrial markets both domestically and internationally. In addition to lumber, Canfor generates revenue from its pulp and paper segment, which includes the production and sale of market pulp. The company also benefits from strategic partnerships and joint ventures that enhance its market reach and operational efficiency. Key factors contributing to its earnings include demand fluctuations in the housing and construction markets, commodity prices, and its ability to optimize operational costs through scale and technological advancements.
Canfor Financial Statement Overview
Summary
Canfor is facing significant financial challenges with declining revenues and profitability. The income statement indicates significant headwinds in maintaining profitability, while the balance sheet shows increasing leverage and reduced equity. Cash flow generation remains a concern, with positive operating cash flow but insufficient to cover capital expenditures.Income Statement
Canfor has experienced declining revenue with a notable decrease from $7.43 billion in 2022 to $5.25 billion in 2024, indicating a negative revenue growth trend. The company faces profitability challenges, evidenced by negative EBIT and net income in recent years. Gross profit margin has also declined, reflecting inefficiencies or cost pressures. Overall, the income statement reveals significant headwinds in maintaining profitability.35
Negative
Balance Sheet
The balance sheet shows a decrease in stockholders' equity, reflecting financial strain. While the debt-to-equity ratio remains manageable, it has increased, indicating higher leverage risk. The equity ratio has declined, suggesting reduced financial stability. Despite these challenges, the company maintains a reasonable cash position, providing some liquidity cushion.60
Neutral
Cash Flow
Operating cash flow has been positive but insufficient to cover capital expenditures, leading to negative free cash flow in recent years. The free cash flow to net income ratio is unfavorable, reflecting cash flow pressures. The company needs to enhance its cash generation capabilities to support operations and growth without over-reliance on external financing.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 5.25B | 5.43B | 7.43B | 7.68B | 5.45B | Gross Profit |
| 946.70M | 904.00M | 2.63B | 3.51B | 1.92B | EBIT |
| -942.20M | -531.60M | 1.07B | 1.91B | 727.30M | EBITDA |
| -487.80M | -34.40M | 1.53B | 2.30B | 1.15B | Net Income Common Stockholders |
| -669.00M | -326.10M | 787.30M | 1.34B | 544.40M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 259.30M | 627.40M | 1.27B | 1.35B | 419.20M | Total Assets |
| 5.57B | 6.13B | 6.74B | 6.17B | 5.11B | Total Debt |
| 703.60M | 399.30M | 392.40M | 335.80M | 773.70M | Net Debt |
| 444.30M | -228.10M | -876.30M | -1.02B | 354.50M | Total Liabilities |
| 1.99B | 1.85B | 1.98B | 2.16B | 2.48B | Stockholders Equity |
| 3.31B | 3.82B | 4.22B | 3.48B | 2.21B |
| Cash Flow | Free Cash Flow | |||
| -352.90M | -432.30M | 487.70M | 1.49B | 872.10M | Operating Cash Flow |
| 174.20M | 154.70M | 1.11B | 1.91B | 1.07B | Investing Cash Flow |
| -672.20M | -603.70M | -1.05B | -468.40M | -246.90M | Financing Cash Flow |
| 124.10M | -185.60M | -179.40M | -504.10M | -463.00M |
Canfor Technical Analysis
Negative
13.90
Price Trends
14.96
Negative
15.51
Negative
15.55
Negative
Market Momentum
0.03
Positive
48.20
Neutral
13.51
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CFP, the sentiment is Negative. The current price of 13.9 is below the 20-day moving average (MA) of 14.99, below the 50-day MA of 14.96, and below the 200-day MA of 15.55, indicating a bearish trend. The MACD of 0.03 indicates Positive momentum. The RSI at 48.20 is Neutral, neither overbought nor oversold. The STOCH value of 13.51 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CFP.
Canfor Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Performance Comparison
TSE:CFP
Canfor
13.56
-2.02
-12.97%
TSE:IFP
Interfor
13.99
-4.97
-26.21%
TSE:CFX
Canfor Pulp Products
0.73
-0.86
-54.09%
Canfor Earnings Call Summary
Earnings Call Date: Mar 6, 2025 | % Change Since: -4.79% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted successful strategic transformations, increased lumber prices, and strong financial performance in the pulp business, contributing to a positive outlook. However, challenges remain with fibre supply, trade disputes, and market volatility. The overall sentiment of the call is balanced with both positive achievements and significant challenges.Highlights
Successful Execution of Strategic Priorities
Canfor successfully executed several strategic priorities, transforming the business structure by closing high-cost assets and investing in low-cost capacity, resulting in an improved operating cost base and enhanced geographic diversification.
Increased Lumber Prices and Improved Profitability
Lumber prices have steadily increased over the last several months, supporting improved profitability, particularly in Western Canada.
Strong Financial Performance in Pulp Business
Canfor Pulp generated solid financial results in Q4, supported by stable global pulp markets and strong performance in the paper business.
Improved Cost Structure and Geographic Diversification
The company has made changes to its operating platform and sales strategy to mitigate trade disputes impacts, with only 20% of sales exposed to duties or tariffs.
Strong Balance Sheet and Capital Allocation Strategy
Canfor enters 2025 with a strong balance sheet, allowing for continued evaluation of strategic growth opportunities and plans for opportunistic share repurchases.
Lowlights
Challenges in Fibre Supply and Trade Disputes
There remains uncertainty with respect to fibre supply in 2025 due to elevated softwood lumber duties and potential additional tariffs.
Reduction in Pulp Shipments
Canfor Pulp's adjusted EBITDA decreased by $7 million from the prior quarter, largely due to a 22% reduction in shipments following the winddown of a production line.
Market Volatility and Uncertainty
The company anticipates continued volatility and market uncertainty, particularly with the threat and implementation of tariffs.
Tariffs and Duties Impact
While changes have been made to mitigate impacts, the company still faces challenges with only 20% of sales exposed to tariffs and duties.
Company Guidance
During the fourth quarter analyst call, Canfor and Canfor Pulp provided guidance on several key metrics for 2025. The company highlighted that 70% of its lumber business is now located outside Canada due to strategic decisions to close high-cost assets in British Columbia and the US South. Canfor anticipates a more modest capital expenditure (CapEx) plan of approximately $250 million for the lumber business and $50 million for Canfor Pulp in 2025. The company also expects to continue share repurchases under its normal course issuer bid. Adjusted EBITDA for the lumber business was $22 million in Q4, up by $64 million from the previous quarter, while Canfor Pulp reported an adjusted EBITDA of $12 million, down by $7 million from Q3. The company has prepared for elevated duties, with only 20% of sales exposed to tariffs, and expects to book a small recovery from the antidumping duty rate announced in the sixth administrative review. Despite market uncertainties, Canfor remains optimistic about mid- to long-term lumber demand and maintains a strong balance sheet for potential strategic growth opportunities.Canfor Corporate Events
Shareholder MeetingsFinancial Disclosures
Canfor Corporation Schedules Annual General Meeting and Q1 2025 Results Call
Neutral
Apr 10, 2025
Canfor Corporation has announced its upcoming Annual General Meeting, which will be held virtually on May 8, 2025, followed by a joint analyst conference call with Canfor Pulp Products Inc. on May 9, 2025, to discuss Q1 2025 financial and operating results. These events are significant as they provide stakeholders with insights into the company’s performance and strategic direction, potentially impacting investor confidence and market positioning.
Spark’s Take on TSE:CFP Stock
According to Spark, TipRanks’ AI Analyst, TSE:CFP is a Neutral.
Canfor’s overall stock score reflects significant financial challenges, including declining revenues and profitability pressures. While recent strategic moves and technical analysis provide some positive momentum, valuation concerns persist with a negative P/E ratio. The earnings call and corporate events highlight strategic improvements and potential for future growth, balancing the score towards a moderate outlook.
To see Spark’s full report on TSE:CFP stock, click here.
Stock BuybackBusiness Operations and Strategy
Canfor Renews Share Repurchase Program
Positive
Mar 19, 2025
Canfor Corporation has announced the renewal of its normal course issuer bid, allowing the company to repurchase up to 5% of its outstanding shares by March 2026. This strategic move is seen as an effective use of financial resources and aligns with the company’s interests, potentially impacting its market positioning and shareholder value positively.
Business Operations and StrategyFinancial Disclosures
Canfor Announces Q4 Results Conference Call for Analysts
Neutral
Feb 19, 2025
Canfor Corporation and Canfor Pulp Products Inc. have announced a joint analyst conference call scheduled for March 7, 2025, to discuss their fourth-quarter 2024 financial and operating results. This announcement is part of Canfor’s ongoing efforts to engage with the analyst and investment community, providing insights into their operations and financial performance, which is crucial for stakeholders monitoring the company’s market positioning and operational strategies.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.