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West Fraser Timber Co (TSE:WFG)
TSX:WFG
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West Fraser Timber Co
(TSX:WFG)61Neutral
West Fraser Timber Co (WFG) vs. S&P 500 (SPY)
Market Cap
$8.76B
Dividend Yield1.66%
Average Volume (3M)164.91K
Price to Earnings (P/E)―
Beta (1Y)1.01
Revenue Growth-2.95%
EPS Growth94.75%
CountryCA
Employees10,800
SectorBasic Materials
Sector Strength56
IndustryForestry
Share Statistics
EPS (TTM)-0.15
Shares Outstanding77,408,120
10 Day Avg. Volume189,827
30 Day Avg. Volume164,915
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.01
Price to Cash Flow (P/CF)9.00
P/FCF Ratio29.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$162.24Price Target Upside47.64% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
West Fraser Timber Co Business Overview & Revenue Model
Company DescriptionWest Fraser Timber Co. Ltd. is an integrated wood products company. Its products include lumber, wood chips, plywood, pulp and newsprint. Its products include Spruce-Pine-Fir, laminated veneer, and southern yellow pine lumber, medium density fiberboard, plywood, treated wood, pulp and paper. The firm operates through the following segments: Lumber, Panels, Pulp and Paper, and Intracompany Fibre Sales. The company was founded by Henry Holman Ketcham Jr., Samuel Kendall Ketcham, and William Peters Ketcham in 1955 and is headquartered in Vancouver, Canada.
How the Company Makes MoneyWest Fraser Timber Co. Ltd. generates revenue primarily through the sale of its wood products, which include lumber, plywood, medium-density fiberboard (MDF), and wood chips. The company operates sawmills, pulp mills, and other manufacturing facilities that process raw timber into these finished goods. Its revenue streams are diversified across various product lines, with a significant portion coming from the sale of lumber, which is used in construction and manufacturing. Additionally, West Fraser benefits from the sale of pulp and paper products to global markets. The company also engages in strategic partnerships and long-term supply agreements with key customers, which help ensure a steady demand for its products. Factors such as housing market trends, construction activity, and global trade dynamics significantly influence the company's earnings.
West Fraser Timber Co Financial Statement Overview
Summary
West Fraser Timber Co shows financial stability with strong equity and low leverage, yet faces profitability and revenue growth challenges, as seen in recent income statements. Cash flow generation remains strong, but profitability issues need addressing for sustainable growth.Income Statement
West Fraser Timber Co has experienced fluctuating revenue trends, with a notable decrease in revenue in recent years. The gross profit margin remains strong at approximately 29.8% in 2024, despite negative net income indicating challenges in cost management or operational efficiency. The EBIT margin has improved from a negative position to a slight positive, suggesting some recovery. The company needs to address profitability challenges to enhance net profit margins.75
Positive
Balance Sheet
The balance sheet shows a solid equity position with an equity ratio of 79.3%, indicating financial stability. The debt-to-equity ratio is low at 0.03, reflecting minimal leverage and low financial risk. However, the return on equity has been negative due to recent losses, which is a concern for long-term equity growth.80
Positive
Cash Flow
The cash flow statement highlights strong operating cash flow in 2024, although free cash flow has decreased compared to 2023. The operating cash flow to net income ratio is robust, suggesting good cash management, but the free cash flow to net income ratio is affected by the negative net income, indicating challenges in generating free cash flow relative to earnings.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 6.17B | 6.45B | 9.70B | 10.52B | 4.59B | Gross Profit |
| 1.84B | 1.77B | 4.56B | 5.87B | 1.89B | EBIT |
| 7.00M | -284.00M | 2.56B | 3.94B | 861.07M | EBITDA |
| 613.00M | 337.00M | 4.17B | 5.68B | 1.36B | Net Income Common Stockholders |
| -5.00M | -167.00M | 1.98B | 2.95B | 588.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 641.00M | 900.00M | 1.16B | 1.57B | 460.33M | Total Assets |
| 8.76B | 9.41B | 9.97B | 10.43B | 4.17B | Total Debt |
| 229.00M | 538.00M | 536.00M | 510.00M | 507.39M | Net Debt |
| -412.00M | -362.00M | -626.00M | -337.00M | 73.39M | Total Liabilities |
| 1.81B | 2.19B | 2.35B | 2.78B | 1.70B | Stockholders Equity |
| 6.95B | 7.22B | 7.62B | 7.66B | 2.47B |
| Cash Flow | Free Cash Flow | |||
| 174.00M | 48.00M | 1.73B | 2.92B | 826.56M | Operating Cash Flow |
| 661.00M | 525.00M | 2.21B | 3.55B | 1.02B | Investing Cash Flow |
| -318.00M | -530.00M | -459.00M | -286.00M | ― | Financing Cash Flow |
| -582.00M | -268.00M | -2.13B | -2.16B | ― |
West Fraser Timber Co Technical Analysis
Negative
109.89
Price Trends
122.07
Negative
126.72
Negative
120.49
Negative
Market Momentum
-3.54
Positive
32.29
Neutral
42.96
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:WFG, the sentiment is Negative. The current price of 109.89 is below the 20-day moving average (MA) of 115.79, below the 50-day MA of 122.07, and below the 200-day MA of 120.49, indicating a bearish trend. The MACD of -3.54 indicates Positive momentum. The RSI at 32.29 is Neutral, neither overbought nor oversold. The STOCH value of 42.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:WFG.
West Fraser Timber Co Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | C$32.22B | 45.69 | 8.24% | 0.58% | 11.98% | 22.53% | |
70 Outperform | C$308.68M | 14.00 | 6.41% | 6.72% | 24.29% | -27.59% | |
61 Neutral | $8.76B | ― | -0.07% | 1.66% | -2.95% | 94.75% | |
47 Neutral | $2.64B | -4.00 | -31.55% | 3.33% | 2.93% | -29.90% | |
43 Neutral | C$12.03M | ― | -24.08% | ― | 0.29% | 9.05% |
* Basic Materials Sector Average
Performance Comparison
TSE:WFG
West Fraser Timber Co
111.77
1.08
0.98%
TSE:ADN
Acadian Timber
17.24
1.26
7.88%
TSE:CFF
Conifex Timber
0.30
-0.28
-48.28%
TSE:WSP
WSP Global
246.90
24.45
10.99%
IFSPF
Interfor
11.16
-4.26
-27.63%
CFPZF
Canfor
10.34
-2.22
-17.68%
West Fraser Timber Co Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: -8.23% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a balanced performance for West Fraser with strong liquidity, improved EBITDA, and successful portfolio optimization contrasted by losses in the Pulp & Paper segment, a significant non-cash impairment in Europe, and declining performance in the lumber segment. The company's strategic actions have mitigated some risks, but challenges remain, particularly in the U.S. South and Europe.Highlights
North American Engineered Wood Products Performance
The North American EWP segment achieved $127 million of adjusted EBITDA in Q4, up from $121 million in Q3, indicating strong segment performance.
Improved EBITDA for Fiscal Year
West Fraser generated $673 million of adjusted EBITDA in 2024, an improvement from $561 million in 2023, reflecting positive synergies from acquisitions and capital investments.
Strong Liquidity Position
The company closed the year with nearly $1.7 billion of available liquidity and $0.5 billion of net cash, providing financial flexibility.
Successful Portfolio Optimization
Optimization initiatives resulted in a $430 million EBITDA increase compared to the 2019 downturn, attributed to acquisitions and mill improvements.
Lowlights
Pulp & Paper Segment Loss
The Pulp & Paper segment incurred a $10 million adjusted EBITDA loss in Q4 due to major maintenance shutdowns.
Non-Cash Impairment in Europe
A $70 million non-cash impairment of goodwill was reported in the European segment, driven by weaker macroeconomic conditions.
Decrease in Lumber Segment EBITDA
Lumber segment posted $21 million in adjusted EBITDA in Q4, down from $62 million in Q3, indicating challenges in the segment.
Challenges in Southern Yellow Pine Market
SYP shipments declined more than 10% from 2023 levels due to challenging market conditions.
Company Guidance
During the West Fraser Q4 2024 Results Conference Call, the company reported generating $140 million in adjusted EBITDA for the fourth quarter, with a 10% margin. For the full year 2024, adjusted EBITDA was $673 million, an 11% margin, marking an improvement from $561 million in 2023. The North American Engineered Wood Products segment showed strength, while Southern Yellow Pine lumber volumes decreased. The company also managed a $21 million adjusted EBITDA in the lumber segment and $127 million in the North America EWP segment for Q4. However, the Pulp & Paper segment faced a $10 million adjusted EBITDA loss due to maintenance shutdowns. West Fraser ended 2024 with nearly $1.7 billion in liquidity and a net cash balance of $412 million after capital expenditures and shareholder returns. For 2025, they forecast capital expenditures between $400 million and $450 million, aligning with their strategy of countercyclical investing. Additionally, the call discussed potential impacts of U.S. tariffs and ongoing cost management efforts.West Fraser Timber Co Corporate Events
Business Operations and StrategyFinancial Disclosures
West Fraser Timber to Discuss Q4 Financial Results in Upcoming Conference Call
Neutral
Jan 23, 2025
West Fraser Timber Co. Ltd. announced a conference call scheduled for February 13, 2025, to discuss their fourth quarter 2024 financial and operating results. This announcement is significant for stakeholders as it provides insights into the company’s performance and strategic direction, potentially impacting its market position and investor relations.
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.