West Fraser Timber Co (WFG) AI Stock Analysis

• Market Cap: C$7.68B
• Dividend Yield: 2.21%
• Average Volume (3M): 230.90K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.81
• Revenue Growth: -6.67%
• EPS Growth: -168.27%
• Country: CA
• Employees: 9,700
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): -3.65
• Shares Outstanding: 76,562,780
• 10 Day Avg. Volume: 217,124
• 30 Day Avg. Volume: 230,904
• PEG Ratio: 20.80
• Price to Book (P/B): 1.45
• Price to Sales (P/S): 1.63
• P/FCF Ratio: 55.68
• 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$110.13
• Price Target Upside: 13.00% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 48 Neutral
• Price Target: C$96.00 ▼(-1.50% Downside)

West Fraser Timber Co's overall stock score is primarily impacted by its challenging financial performance and valuation concerns. The technical analysis suggests bearish momentum, while the earnings call highlights significant operational challenges. Despite a strong balance sheet, the company's profitability and cash flow issues weigh heavily on its outlook.

Positive Factors

Liquidity and Cash Position

Substantial available liquidity and a positive net cash balance provide durable financial flexibility through a protracted downturn. This supports defensive capital allocation — funding capex, working capital, dividends or opportunistic buybacks — without immediate reliance on external financing.

Low Financial Leverage

Extremely low leverage reduces solvency risk and preserves strategic optionality in cyclical stress. It enables management to prioritize operational fixes and portfolio rationalization over deleveraging, and provides capacity to absorb shocks or pursue targeted reinvestments as markets recover.

Portfolio and Asset Quality

Active asset portfolio management — selling low-quality plants and concentrating on higher-quality lumber and OSB assets — improves long-term cost structure and competitiveness. A higher-quality asset base supports better operating margins when demand normalizes and enhances resilience across cycles.

Negative Factors

Profitability Compression

Sustained negative EBITDA across core segments signals deep cyclical weakness and margin pressure from lower prices and duties. Prolonged operating losses erode retained earnings, constrain reinvestment capacity, and raise the risk that short-term cost cuts won't fully offset structural demand weakness.

Free Cash Flow Deterioration

A severe drop in free cash flow materially weakens the company’s ability to self-fund capex, dividends and strategic initiatives. Even with liquidity on hand, persistent FCF weakness forces harder choices on capital allocation and increases reliance on balance sheet buffers if the downcycle persists.

Structural Demand Impairments & Curtailments

A multi-hundred-million goodwill write-down and prior OSB mill curtailments reflect a recalibration of long-term demand and pricing assumptions. Large impairments and capacity idlings signal structural market softening that may permanently reduce asset values and future earnings power in key segments.

West Fraser Timber Co Business Overview & Revenue Model

Company Description

West Fraser Timber Co. Ltd., a diversified wood products company, engages in manufacturing, selling, marketing, and distributing lumber, engineered wood products, pulp, newsprint, wood chips, and other residuals and renewable energy. It offers spruce-pine-fir and southern yellow pine lumber, treated wood products, medium density fiberboard panels and plywood, oriented strand board, and laminated veneer lumber wood products. The company also provides northern bleached softwood Kraft pulp and bleached chemical thermo-mechanical pulp used to produce various paper products, including printing and writing papers, specialty grades, and various tissue products. It sells its products to major retail chains, contractor supply yards, and wholesalers, as well as industrial customers for further processing or as components for other products in Canada, the United States, China, Europe, Asia, and other countries. West Fraser Timber Co. Ltd. was founded in 1955 and is based in Vancouver, Canada.

How the Company Makes Money

West Fraser Timber Co. generates revenue primarily through the sale of its wood products, with key revenue streams coming from softwood lumber, oriented strand board (OSB), plywood, and engineered wood products. The company benefits from its integrated supply chain, which allows it to optimize production and distribution efficiencies. Additionally, West Fraser capitalizes on favorable market conditions in the construction and housing sectors, which drive demand for its products. The company also engages in partnerships with suppliers and distributors to enhance its market reach and customer base, contributing to its overall earnings. Fluctuations in lumber prices, changes in housing starts, and demand in various end-use markets significantly influence its financial performance.

West Fraser Timber Co Financial Statement Overview

Summary

West Fraser Timber Co is facing a challenging financial environment with declining revenues and profitability pressures. The company maintains a strong balance sheet with low leverage, but its cash flow position is concerning, with significant declines in free cash flow.

Income Statement

West Fraser Timber Co has experienced a decline in revenue over the TTM (Trailing-Twelve-Months) period, with a negative revenue growth rate of -2.49%. The company is currently facing profitability challenges, as indicated by a negative net profit margin of -2.18% and a negative EBIT margin of -1.20%. However, the gross profit margin remains relatively healthy at 27.77%, suggesting some operational efficiency.

Balance Sheet

The balance sheet reflects a strong equity position with a low debt-to-equity ratio of 0.048, indicating low leverage and financial stability. However, the return on equity is negative at -1.82%, reflecting the company's current profitability challenges. The equity ratio is not explicitly provided but the strong equity base suggests a solid financial foundation.

Cash Flow

Cash flow analysis shows a significant decline in free cash flow growth at -76.44%, indicating potential liquidity issues. The operating cash flow to net income ratio is 0.83, suggesting that operating cash flows are not fully covering net income. The free cash flow to net income ratio of 0.20 further highlights the company's cash flow challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.69B	6.17B	6.44B	9.79B	10.43B	4.36B
Gross Profit	1.13B	1.84B	1.76B	4.60B	5.82B	1.81B
EBITDA	441.95M	654.38M	534.72M	3.23B	4.48B	1.02B
Net Income	-245.70M	―	-166.60M	1.99B	2.92B	586.09M
Balance Sheet
Total Assets	8.58B	8.75B	9.35B	10.07B	10.33B	4.17B
Cash, Cash Equivalents and Short-Term Investments	545.47M	640.62M	893.53M	1.17B	1.55B	459.83M
Total Debt	322.69M	228.86M	534.13M	541.26M	522.04M	513.09M
Total Liabilities	1.96B	1.80B	2.18B	2.38B	2.75B	1.70B
Stockholders Equity	6.62B	6.95B	7.17B	7.69B	7.58B	2.47B
Cash Flow
Free Cash Flow	26.41M	180.88M	72.15M	1.67B	2.83B	793.53M
Operating Cash Flow	450.31M	644.49M	556.89M	2.14B	3.46B	982.32M
Investing Cash Flow	-418.87M	-343.67M	-586.36M	-461.83M	-281.20M	-173.90M
Financing Cash Flow	-445.26M	-528.35M	-247.96M	-2.04B	-2.09B	-340.76M

West Fraser Timber Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 97.46
• 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:WFG, the sentiment is Positive. The current price of 97.46 is above the 20-day moving average (MA) of 87.12, above the 50-day MA of 85.00, and above the 200-day MA of 95.62, indicating a bullish trend. The MACD of 2.85 indicates Negative momentum. The RSI at 74.77 is Negative, neither overbought nor oversold. The STOCH value of 93.10 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:WFG.

West Fraser Timber Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SJ	74 Outperform	C$4.85B	14.53	17.08%	1.43%	1.98%	7.05%
ADN	69 Neutral	C$301.73M	19.83	4.46%	7.35%	-28.86%	-48.20%
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%

West Fraser Timber Co Corporate Events

West Fraser Writes Off U.S. Lumber Goodwill and Sets 2026 Operating Targets

West Fraser Timber will take a non-cash goodwill impairment charge of about $409 million in the fourth quarter of 2025, writing off all goodwill associated with its U.S. lumber operations in response to a prolonged market downcycle, weaker species-specific pricing trends, and lower demand and pricing for wood chip residuals. At the same time, the company has set its 2026 operational outlook, targeting shipments of 2.4–2.7 billion board feet each of SPF and SYP lumber, 5.9–6.3 billion square feet of North American OSB and 1.0–1.25 billion square feet of European and U.K. OSB, while signalling stable input costs, improving contractor availability and equipment lead times, and capital expenditures of $300–$350 million, suggesting a cautious but steady investment stance despite current market headwinds.

The most recent analyst rating on (TSE:WFG) stock is a Buy with a C$85.00 price target. To see the full list of analyst forecasts on West Fraser Timber Co stock, see the TSE:WFG Stock Forecast page.

West Fraser Announces Indefinite Curtailment of OSB Mill Amid Weakening Demand

West Fraser Timber Co. Ltd. announced the indefinite curtailment of its OSB mill in High Level, Alberta, due to a significant weakening in OSB demand, which will reduce the company’s capacity by 860 million square feet. The company plans to mitigate the impact on approximately 190 affected employees by offering work opportunities at other operations. Additionally, the idling of a production line at its Cordele, Georgia facility will continue indefinitely, affecting an additional 440 million square feet of capacity. This decision will result in an estimated $200 million asset impairment loss in the fourth quarter of 2025.

The most recent analyst rating on (TSE:WFG) stock is a Hold with a C$85.00 price target. To see the full list of analyst forecasts on West Fraser Timber Co stock, see the TSE:WFG Stock Forecast page.