Western Forest Prod (WEF) AI Stock Analysis

• Market Cap: C$146.86M
• Dividend Yield: N/A
• Average Volume (3M): 35.76K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.84
• Revenue Growth: 2.06%
• EPS Growth: -46.23%
• Country: CA
• Employees: 2,051
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): -5.71
• Shares Outstanding: 10,558,183
• 10 Day Avg. Volume: 33,267
• 30 Day Avg. Volume: 35,762
• PEG Ratio: 0.07
• Price to Book (P/B): 0.23
• Price to Sales (P/S): 0.12
• P/FCF Ratio: -9.55
• 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$13.00
• Price Target Upside: 17.22% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 47 Neutral
• Price Target: C$13.50 ▲(21.73% Upside)

Western Forest Prod's overall stock score is primarily impacted by its financial performance challenges, including declining revenue and profitability, and significant cash flow issues. The technical analysis indicates a bearish trend, while valuation metrics are unattractive due to negative earnings. The earnings call provides some positive operational highlights but is largely overshadowed by ongoing market and operational challenges.

Positive Factors

Low Leverage

A very low debt-to-equity ratio indicates prudent leverage management, increasing resilience to cyclical lumber price swings and tariff shocks. This structural conservatism preserves financial flexibility for working capital, selective capital spending, or navigating prolonged demand softness.

Operational Efficiency Improvements

Improved inventory turnover and above-target mill uptime imply better working capital velocity and production reliability. Structurally higher throughput and inventory discipline reduce carrying costs, support margin stability, and improve responsiveness to variable log supply and demand over coming quarters.

Stronger Liquidity Position

Larger liquidity, plus a new $30m letter of credit and proactive duty staging, gives structural capacity to absorb tariff costs and temporary cash shortfalls. Sustained liquidity supports operational continuity, strategic inventory management, and measured capital allocation amid industry volatility.

Negative Factors

Severe Cash Flow Deterioration

A dramatic drop in free cash flow indicates the company is generating insufficient cash from operations to fund capex or repay obligations. Persistently weak cash conversion constrains reinvestment, forces capital spending cuts, and increases reliance on liquidity facilities, impairing long-term competitiveness.

Collapsing Revenue and Margins

An extreme decline in trailing revenue with compressed gross (6.8%) and negative net margins signals structural demand or mix deterioration. Sustained revenue shrinkage undermines scale economics, depresses margins, and limits ability to cover fixed costs or invest in product and market diversification.

Trade & Operational Headwinds

Sharply higher softwood duties and a new 10% U.S. tariff materially raise cost-to-market and reduce competitiveness in key export markets. Coupled with strikes and permitting delays, these structural trade and operational barriers compress volumes and force production cuts, harming long-term revenue mix.

Western Forest Prod Business Overview & Revenue Model

Company Description

Western Forest Products Inc. (WEF) is a leading coastal lumber producer based in British Columbia, Canada, specializing in the harvesting, manufacturing, and sale of high-quality wood products. The company operates within the forestry sector, focusing on sustainable forest management and producing a variety of products, including lumber, logs, and specialty wood products for both domestic and international markets. WEF is committed to environmental stewardship and the responsible use of forest resources, ensuring compliance with industry standards and regulations.

How the Company Makes Money

Western Forest Products generates revenue primarily through the sale of lumber and logs, which are used in residential and commercial construction, as well as in various industrial applications. The company operates sawmills and remanufacturing facilities that convert raw timber into finished wood products, enabling it to capture higher margins. Key revenue streams include the sale of dimensional lumber, specialty products, and wood chips, with a significant portion of sales coming from exports to international markets, particularly the United States and Asia. Additionally, WEF benefits from long-term partnerships with various distributors and manufacturers, which help stabilize demand and pricing for its products. The company also engages in forest management and harvesting operations, providing additional revenue through sustainable logging practices and the sale of timber rights.

Western Forest Prod Financial Statement Overview

Summary

Western Forest Prod is facing financial difficulties with declining revenues and profitability. The income statement shows negative net profit and EBIT margins. The balance sheet is stable with low leverage, but returns are under pressure. Cash flow volatility adds risk, highlighting the need for strategic adjustments.

Income Statement

Western Forest Prod has faced declining revenue and profitability over recent periods. The TTM data shows a negative net profit margin and EBIT margin, indicating operational challenges. Revenue growth has been negative, reflecting a downturn in sales. However, the company has maintained a positive EBITDA margin, suggesting some operational efficiency.

Balance Sheet

The company's balance sheet shows a relatively low debt-to-equity ratio, indicating conservative leverage. However, the return on equity has been negative in recent periods, reflecting challenges in generating returns for shareholders. The equity ratio remains stable, suggesting a solid capital structure.

Cash Flow

Cash flow analysis reveals significant volatility, with negative free cash flow growth in the TTM period. The operating cash flow to net income ratio is positive, but free cash flow to net income is low, indicating cash flow challenges. Historical data shows better cash flow management, but recent trends are concerning.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.06B	1.06B	1.02B	1.44B	1.42B	964.90M
Gross Profit	68.00M	90.20M	50.60M	254.50M	399.00M	171.60M
EBITDA	-52.70M	13.70M	-35.10M	137.00M	317.70M	107.00M
Net Income	-63.90M	-30.40M	-68.50M	61.70M	201.40M	33.10M
Balance Sheet
Total Assets	734.70M	915.50M	915.40M	932.80M	959.00M	852.20M
Cash, Cash Equivalents and Short-Term Investments	5.70M	7.90M	2.30M	15.80M	130.00M	2.90M
Total Debt	38.50M	105.00M	104.60M	23.20M	18.30M	93.70M
Total Liabilities	236.00M	349.20M	347.50M	281.10M	341.80M	346.60M
Stockholders Equity	492.10M	558.20M	565.00M	647.20M	612.10M	504.50M
Cash Flow
Free Cash Flow	16.70M	-13.30M	-78.20M	-56.80M	248.50M	61.70M
Operating Cash Flow	50.70M	20.10M	-33.80M	-10.30M	281.60M	80.40M
Investing Cash Flow	40.60M	3.00M	-38.60M	-59.90M	38.70M	-14.50M
Financing Cash Flow	-90.60M	-17.50M	58.90M	-44.00M	-193.20M	-65.10M

Western Forest Prod Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 11.09
• 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:WEF, the sentiment is Positive. The current price of 11.09 is below the 20-day moving average (MA) of 11.58, below the 50-day MA of 11.31, and below the 200-day MA of 11.97, indicating a bullish trend. The MACD of 0.54 indicates Negative momentum. The RSI at 82.99 is Negative, neither overbought nor oversold. The STOCH value of 93.75 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:WEF.

Western Forest Prod 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%
WFG	48 Neutral	C$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%
GFP	45 Neutral	C$52.00M	-0.51	-73.85%	―	-17.95%	-97.06%
CFF	43 Neutral	C$6.32M	-0.18	-45.26%	―	10.33%	-52.20%

Western Forest Prod Corporate Events

Western Forest Products Sets Date for Q4 2025 Results and Analyst Call

Western Forest Products Inc. has scheduled the release of its fourth quarter 2025 financial and operating results for February 10, 2026, and will follow with an analyst conference call on February 11, 2026, hosted by senior executives including the CEO, CFO and Senior Vice President of Sales, Marketing and Manufacturing. The planned call underscores the company’s engagement with the analyst community and provides a platform to discuss performance, strategic developments and market conditions that may influence its positioning in global softwood markets and the outlook for stakeholders.

The most recent analyst rating on (TSE:WEF) stock is a Hold with a C$13.00 price target. To see the full list of analyst forecasts on Western Forest Prod stock, see the TSE:WEF Stock Forecast page.

Western Forest Products Faces Financial Challenges Amid Tariffs and Duty Expenses

Western Forest Products Inc. reported a significant financial downturn in the third quarter of 2025, with an adjusted EBITDA of negative $65.9 million, largely due to a non-cash export duty expense of $59.5 million. The company also faced a net loss of $61.3 million, exacerbated by ongoing challenges such as the US Department of Commerce’s final antidumping and countervailing duty rates, and a new 10% tariff on imported lumber products imposed by the US government. Despite these setbacks, Western is working on strategic initiatives, including the construction of two continuous dry kilns to transition to higher value products, and has improved its liquidity and reduced net debt.

The most recent analyst rating on (TSE:WEF) stock is a Hold with a C$14.00 price target. To see the full list of analyst forecasts on Western Forest Prod stock, see the TSE:WEF Stock Forecast page.