Canfor (CFP) AI Stock Analysis

• Market Cap: $1.30B
• Dividend Yield: N/A
• Average Volume (3M): 157.14K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.08
• 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: 1.94
• Enterprise Value/Revenue: 0.48
• Enterprise Value/Gross Profit: 2.45
• Enterprise Value/Ebitda: -7.68
• 1Y Price Target: $15.29
• Price Target Upside: 30.49% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 53 Neutral
• Price Target: C$12.50 ▲(6.66% Upside)

Canfor's overall stock score reflects significant financial challenges, including declining revenues and negative profit margins. While technical indicators suggest a bearish trend, strategic acquisitions and strong liquidity provide some positive outlook. The valuation remains unattractive due to a negative P/E ratio and lack of dividend yield.

Positive Factors

Strategic Acquisitions

The acquisition of sawmills in Sweden and fleet modernization in the U.S. South enhance Canfor's production capacity and geographic diversification, positioning the company for long-term growth and improved market competitiveness.

Strong Liquidity Position

A robust liquidity position allows Canfor to navigate market uncertainties and invest in strategic initiatives, supporting long-term operational stability and growth.

Operational Improvements

Operational improvements in sourcing and cost structure enhance efficiency and competitiveness, potentially leading to better margins and financial performance over time.

Negative Factors

Declining Revenues

Declining revenues and negative margins indicate operational struggles, which can hinder Canfor's ability to invest in growth and maintain competitive positioning.

Cash Flow Challenges

Cash flow challenges limit Canfor's ability to fund operations and strategic initiatives, impacting its long-term financial health and growth potential.

Weak Global Lumber Market

Weak global lumber market conditions and high duties affect profitability, posing a risk to Canfor's revenue and margin sustainability in the long term.

Canfor Business Overview & Revenue Model

Company Description

Canfor Corporation (CFP) is a leading integrated forest products company based in Canada, primarily engaged in the production and sale of lumber, engineered wood products, and wood chips. The company operates sawmills and manufacturing facilities across North America, focusing on sustainable forestry practices and innovative product development. Canfor serves various markets, including construction, housing, and industrial sectors, leveraging its extensive distribution network and commitment to quality.

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 experiencing financial difficulties with declining revenues, negative profit margins, and cash flow challenges. Despite a manageable debt-to-equity ratio, the company struggles with profitability and cash generation, which are critical for future growth and stability.

Income Statement

Canfor's income statement reveals a challenging period with declining revenues and negative profit margins. The TTM data shows a gross profit margin of 12.99% and a net profit margin of -12.02%, indicating significant profitability issues. Revenue has decreased by 4% compared to the previous period, and the EBIT and EBITDA margins are negative, reflecting operational struggles. The company needs to address these declines to improve financial health.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio of 0.23, suggesting manageable leverage levels. However, the return on equity is negative at -18.86%, indicating that the company is not generating returns for shareholders. The equity ratio stands at 56.06%, which is a positive sign of financial stability. Overall, while leverage is under control, profitability remains a concern.

Cash Flow

Cash flow analysis indicates a decline in free cash flow growth by 19.74% in the TTM period, highlighting cash generation challenges. The operating cash flow to net income ratio is 0.16, and the free cash flow to net income ratio is -2.03, reflecting cash flow issues relative to earnings. The company needs to enhance cash flow management to support operations and growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.29B	5.25B	5.43B	7.43B	7.68B	5.45B
Gross Profit	1.03B	946.70M	904.00M	2.63B	3.51B	1.92B
EBITDA	-328.90M	-487.80M	-30.50M	1.53B	2.30B	1.15B
Net Income	-647.20M	-669.00M	-326.10M	787.30M	1.34B	544.40M
Balance Sheet
Total Assets	5.42B	5.57B	6.13B	6.74B	6.17B	5.11B
Cash, Cash Equivalents and Short-Term Investments	112.90M	259.30M	627.40M	1.27B	1.35B	419.20M
Total Debt	725.00M	703.60M	399.30M	392.40M	335.80M	773.70M
Total Liabilities	2.11B	1.99B	1.85B	1.98B	2.16B	2.48B
Stockholders Equity	3.04B	3.31B	3.82B	4.22B	3.48B	2.21B
Cash Flow
Free Cash Flow	-293.60M	-352.90M	-432.30M	487.70M	1.49B	872.10M
Operating Cash Flow	132.70M	174.20M	154.70M	1.11B	1.91B	1.07B
Investing Cash Flow	-560.30M	-672.20M	-603.70M	-1.05B	-468.40M	-246.90M
Financing Cash Flow	104.50M	124.10M	-185.60M	-179.40M	-504.10M	-463.00M

Canfor Technical Analysis

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

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CFP, the sentiment is Neutral. The current price of 11.72 is below the 20-day moving average (MA) of 11.81, below the 50-day MA of 12.15, and below the 200-day MA of 13.45, indicating a neutral trend. The MACD of -0.07 indicates Negative momentum. The RSI at 52.67 is Neutral, neither overbought nor oversold. The STOCH value of 61.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:CFP.

Canfor Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
CFP	53 Neutral	$1.30B	―	-15.06%	―	1.76%	34.61%
IFP	51 Neutral	$404.43M	―	-20.72%	―	-3.63%	31.61%
WFG	48 Neutral	$6.82B	-20.03	-3.61%	2.10%	-6.67%	-168.27%
WEF	48 Neutral	C$122.05M	-5.65	-12.20%	―	2.06%	-46.23%
GFP	45 Neutral	$52.21M	-1.69	-73.85%	―	-17.95%	-97.06%
CFF	37 Underperform	C$9.38M	-0.40	-45.26%	―	10.33%	-52.20%

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.

Canfor Announces Q3 2025 Results Conference Call

Canfor Corporation and Canfor Pulp Products Inc. have announced a joint analyst conference call scheduled for November 6, 2025, to discuss their third-quarter financial and operating results. This call will provide insights into the companies’ performance and strategies, potentially impacting investor perceptions and market positioning.