Canfor (CFP) AI Stock Analysis

• Market Cap: C$1.67B
• Dividend Yield: N/A
• Average Volume (3M): 157.14K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.09
• Revenue Growth: 1.76%
• EPS Growth: 34.61%
• Country: CA
• Employees: 6,634
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): -1.48
• Shares Outstanding: 116,428,850
• 10 Day Avg. Volume: 138,224
• 30 Day Avg. Volume: 157,140
• PEG Ratio: -0.02
• Price to Book (P/B): 0.54
• Price to Sales (P/S): 0.34
• P/FCF Ratio: -5.10
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$15.00
• Price Target Upside: 27.99% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 48 Neutral
• Price Target: C$14.00 ▲(19.45% Upside)

Canfor's overall stock score reflects significant financial and operational challenges, with weak profitability and cash flow issues being the most pressing concerns. Technical indicators suggest bearish momentum, and valuation metrics are unattractive due to negative earnings. While the company has strong liquidity and strategic initiatives in place, the current market conditions and financial performance weigh heavily on the stock's outlook.

Positive Factors

Liquidity Buffer

A robust liquidity reserve exceeding $1.2B provides durable financial flexibility to fund planned capex, support operations through cyclical downturns, and execute strategic moves without immediate refinancing. This buffer materially reduces short-term solvency risk over 2–6 months.

Strategic Capacity Expansion

Modernizing U.S. South assets and adding three Swedish sawmills expands scale and modernizes footprint, improving long-term cost competitiveness and geographic diversification. These structural moves strengthen supply flexibility and market access beyond transient demand cycles.

Diversified Revenue Mix

A product mix of dimensional and specialty lumber, engineered wood and residual chip sales, combined with domestic and Asian market exposure, spreads demand risk across end markets and products, supporting steadier cash generation through market shifts.

Negative Factors

Negative Profitability

Sustained negative EBIT and net margins indicate structural pricing or cost pressures and erosion of operating profitability. Persistent losses impair retained earnings, constrain reinvestment capacity, and require operational or strategic fixes to restore long-term shareholder returns.

Weak Cash Conversion

Declining free cash flow and poor FCF-to-income conversion signal weak cash generation relative to reported results. Over the medium term this raises dependence on liquidity lines, limits organic funding for capex or debt reduction, and heightens refinancing and execution risk.

Pulp Segment Financial Stress

Canfor Pulp's net debt and active lender negotiations are a structural constraint on the pulp business and could force deleveraging measures. This restricts investment, raises execution risk for fibre strategies, and may necessitate asset sales or capital reallocation over months ahead.

Canfor Business Overview & Revenue Model

Company Description

Canfor Corporation operates as an integrated forest products company in the United States, Asia, Canada, Europe, and internationally. It operates through two segments, Lumber, and Pulp and Paper. The company manufactures and sells finger-jointed lumber, engineered wood products, wood chips and pellets, and logs, as well as custom specialty products, including strength-rated trusses, beams, and tongue-and-groove timber; and generates green energy. It also produces and sells pulp and paper products, including bleached and unbleached softwood kraft pulp, as well as bleached, colored, and unbleached kraft paper. The company was founded in 1938 and is headquartered in Vancouver, Canada.

How the Company Makes Money

Canfor generates revenue primarily through the sale of lumber products, which includes dimensional lumber, specialty lumber, and engineered wood products. The company benefits from a diversified revenue model that includes both domestic and international sales, with key markets in the United States and Asia. Additional revenue streams come from the sale of wood chips and residuals, which are byproducts of the lumber manufacturing process. Canfor's earnings are significantly influenced by lumber prices, demand in the construction sector, and housing starts in North America. The company also engages in partnerships with various distributors and retailers, enhancing its market reach and distribution capabilities. Furthermore, Canfor's commitment to sustainable forest management and eco-friendly practices can create value through premium pricing and customer loyalty in environmentally conscious markets.

Canfor Financial Statement Overview

Summary

Canfor is facing financial headwinds, with significant challenges in profitability and cash flow management. The income statement and cash flow metrics indicate a need for strategic realignment to address declining margins and cash flow issues. The balance sheet remains relatively stable, but the company must focus on improving operational efficiency and cost management.

Income Statement

Canfor's income statement shows a challenging period with declining profitability. The TTM data indicates negative margins across the board, with a net profit margin of -12.24% and an EBIT margin of -13.91%. Revenue growth is slightly positive at 1.08%, but this is overshadowed by the significant losses. Historical data shows a sharp decline from profitable years in 2020 and 2021, suggesting a need for strategic adjustments to return to profitability.

Balance Sheet

The balance sheet remains relatively stable with a manageable debt-to-equity ratio of 0.24 in the TTM period. However, the return on equity is negative at -20.03%, indicating inefficiencies in generating returns for shareholders. The equity ratio is healthy, suggesting a solid asset base, but the declining equity and increasing debt levels over recent years pose potential risks.

Cash Flow

Cash flow analysis reveals a negative free cash flow growth rate of -12.33% in the TTM period, indicating cash flow challenges. The operating cash flow to net income ratio is positive at 0.12, but the free cash flow to net income ratio is concerning at -2.21, reflecting cash flow issues relative to earnings. Historical data shows fluctuating cash flow performance, highlighting the need for improved cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.34B	5.25B	5.43B	7.43B	7.68B	5.45B
Gross Profit	760.60M	946.70M	904.00M	2.63B	3.51B	1.92B
EBITDA	-291.60M	-487.80M	-30.50M	1.53B	2.30B	1.15B
Net Income	-469.50M	-669.00M	-326.10M	787.30M	1.34B	544.40M
Balance Sheet
Total Assets	5.57B	5.57B	6.13B	6.74B	6.17B	5.11B
Cash, Cash Equivalents and Short-Term Investments	154.40M	259.30M	627.40M	1.27B	1.35B	419.20M
Total Debt	965.90M	703.60M	399.30M	392.40M	335.80M	773.70M
Total Liabilities	2.38B	1.99B	1.85B	1.98B	2.16B	2.48B
Stockholders Equity	2.91B	3.31B	3.82B	4.22B	3.48B	2.21B
Cash Flow
Free Cash Flow	-257.40M	-352.90M	-432.30M	487.70M	1.49B	872.10M
Operating Cash Flow	91.90M	174.20M	154.70M	1.11B	1.91B	1.07B
Investing Cash Flow	-568.00M	-672.20M	-603.70M	-1.05B	-468.40M	-246.90M
Financing Cash Flow	88.40M	124.10M	-185.60M	-179.40M	-504.10M	-463.00M

Canfor Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 11.72
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CFP, the sentiment is Positive. The current price of 11.72 is below the 20-day moving average (MA) of 12.21, below the 50-day MA of 11.93, and below the 200-day MA of 13.02, indicating a bullish trend. The MACD of 0.57 indicates Negative momentum. The RSI at 80.09 is Negative, neither overbought nor oversold. The STOCH value of 93.66 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CFP.

Canfor Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SJ	74 Outperform	$4.85B	14.53	17.08%	1.43%	1.98%	7.05%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
CFX	50 Neutral	C$38.49M	-3.77	-6.02%	―	-15.38%	94.27%
WFG	48 Neutral	$7.68B	-22.58	-3.61%	2.21%	-6.67%	-168.27%
CFP	48 Neutral	C$1.67B	-3.59	-15.06%	―	1.76%	34.61%
WEF	47 Neutral	C$146.86M	-2.30	-12.20%	―	2.06%	-46.23%
IFP	46 Neutral	C$524.31M	-1.81	-20.72%	―	-3.63%	31.61%

Canfor Corporate Events

Canfor Corporation to Acquire Remaining Shares of Canfor Pulp

Canfor Corporation has announced an agreement to acquire all remaining shares of Canfor Pulp Products Inc. that it does not already own, under a court-approved plan. This acquisition offers Canfor Pulp shareholders a premium on their shares and provides options for cash or stock consideration, reflecting a strategic move to consolidate operations and potentially enhance capital access and operational efficiencies. The agreement includes a go-shop period, allowing Canfor Pulp to seek superior proposals, indicating a flexible approach to maximizing shareholder value.

The most recent analyst rating on (TSE:CFP) stock is a Sell with a C$13.00 price target. To see the full list of analyst forecasts on Canfor stock, see the TSE:CFP Stock Forecast page.