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West Fraser Timber Co (TSE:WFG)
TSX:WFG
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West Fraser Timber Co
(TSX:WFG)
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Rating:48Neutral
Price Target:
C$85.00
▼(-1.44% 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
Strong Balance Sheet
A strong balance sheet with substantial liquidity provides West Fraser with financial flexibility to navigate industry challenges and invest in growth opportunities.
Investment in High-Quality Assets
Strategic asset management enhances operational efficiency and positions West Fraser to capitalize on market upswings, supporting long-term competitiveness.
Sustainable Forestry Practices
Commitment to sustainability can enhance brand reputation and ensure long-term resource availability, aligning with increasing environmental regulations and consumer preferences.
Negative Factors
Permanent Mill Closures
Permanent closures due to timber supply challenges and soft markets reduce production capacity, impacting revenue potential and market presence.
Negative EBITDA
Negative EBITDA indicates operational inefficiencies and profitability challenges, which could hinder investment in growth and innovation.
Impact of Duties and Tariffs
High duties and tariffs increase costs and reduce competitiveness in key markets, potentially leading to lower margins and profitability.
West Fraser Timber Co (WFG) vs. iShares MSCI Canada ETF (EWC)
Market Cap
$6.82B
Dividend Yield2.1%
Average Volume (3M)230.90K
Price to Earnings (P/E)―
Beta (1Y)0.82
Revenue Growth-6.67%
EPS Growth-168.27%
CountryCA
Employees9,700
SectorBasic Materials
Sector Strength58
IndustryPaper, Lumber & Forest Products
Share Statistics
EPS (TTM)-3.71
Shares Outstanding76,562,780
10 Day Avg. Volume217,124
30 Day Avg. Volume230,904
Financial Highlights & Ratios
PEG Ratio14.46
Price to Book (P/B)1.01
Price to Sales (P/S)1.13
P/FCF Ratio38.69
Enterprise Value/Market Cap1.10
Enterprise Value/Revenue1.32
Enterprise Value/Gross Profit6.62
Enterprise Value/Ebitda16.96
Forecast
1Y Price Target
$121.38Price Target Upside40.75% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
West Fraser Timber Co Business Overview & Revenue Model
Company DescriptionWest Fraser Timber Co. (WFG) is a leading North American wood products company headquartered in Vancouver, Canada. The company operates in various sectors of the forestry industry, including lumber, panels, and engineered wood products. West Fraser is known for its commitment to sustainable forestry practices and produces a wide range of products that serve both residential and commercial construction markets. Its core offerings include softwood lumber, oriented strand board (OSB), plywood, and specialty wood products, catering to customers across North America and internationally.
How the Company Makes MoneyWest 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 Earnings Call Summary
Earnings Call Date:Oct 22, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 17, 2026
Earnings Call Sentiment Negative
The earnings call reflects significant challenges faced by West Fraser, including negative EBITDA, lower product prices, and new tariffs impacting costs. Despite these challenges, the company's strong balance sheet and strategic asset management position it well for future opportunities. However, the negative aspects weighed heavily on this quarter's performance.Q3-2025 Updates
Positive Updates
Strong Balance Sheet
West Fraser exited Q3 2025 with nearly $1.6 billion of available liquidity and a positive net cash position, which supports the company's defensive capital allocation strategy.
Investment in High-Quality Assets
The company has divested less efficient mills and acquired high-quality lumber and OSB assets, enhancing strength at the bottom of the cycle.
Operational Improvements
Improved operating performance noted in Cariboo Pulp's daily output following maintenance.
Negative Updates
Negative Adjusted EBITDA
West Fraser posted a negative $144 million adjusted EBITDA in Q3 2025, with the lumber segment alone posting a negative $123 million.
Impact of Duties and Tariffs
Included a $67 million out-of-period duty expense related to Administrative Review 6, with a combined duty rate of 26.5%. Additionally, new Section 232 tariffs of 10% on imported softwood timber and lumber into the U.S. were imposed.
Lower Product Prices
Lower product prices for lumber and North American OSB products were significant detractors compared to Q2.
Market Demand Challenges
U.S. housing starts averaged just 1.31 million units, and repair and remodeling demand remained subdued.
Reduction in Shipment Guidance
Narrowed 2025 shipment guidance for SPF and SYP due to demand softness, with a 20-25% curtailment of capacity implied for Q4.
Company Guidance
During West Fraser's third quarter 2025 conference call, the company provided key financial guidance and operational updates. The firm reported a negative $144 million in adjusted EBITDA due to an extended cycle trough, with a significant $67 million out-of-period duty expense related to Administrative Review 6 (AR6). The North American lumber segment saw a negative $123 million EBITDA, while the North America EWP and Pulp and Paper segments reported negative $15 million and $6 million EBITDA, respectively. The European business, however, generated $1 million in adjusted EBITDA. The company maintained a strong financial position with $1.6 billion in liquidity and a positive net cash balance of $212 million, despite $90 million in capital expenditures and $65 million allocated to share buybacks and dividends. West Fraser narrowed its 2025 shipments guidance for SPF and SYP while confirming a capital expenditure range of $400 million to $450 million. The company remains focused on managing its asset portfolio, emphasizing quality and resilience through the cycle, and continues to monitor macroeconomic conditions and trade policies closely.West Fraser Timber Co Financial Statement Overview
Summary
West Fraser Timber Co is experiencing financial challenges with declining revenues and profitability pressures. Despite a strong balance sheet with low leverage, the company faces significant cash flow issues, with a notable decline in free cash flow growth. The negative net profit margin and EBIT margin further highlight profitability concerns.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.45
Neutral
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.60
Neutral
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.40
Negative
| 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
Neutral
86.24
Price Trends
88.79
Negative
94.35
Negative
99.25
Negative
Market Momentum
-0.48
Negative
50.54
Neutral
77.89
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:WFG, the sentiment is Neutral. The current price of 86.24 is above the 20-day moving average (MA) of 84.31, below the 50-day MA of 88.79, and below the 200-day MA of 99.25, indicating a neutral trend. The MACD of -0.48 indicates Negative momentum. The RSI at 50.54 is Neutral, neither overbought nor oversold. The STOCH value of 77.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:WFG.
West Fraser Timber Co Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $4.68B | 13.97 | 17.08% | 1.45% | 1.98% | 7.05% | |
69 Neutral | C$256.93M | 16.89 | 4.46% | 7.41% | -28.86% | -48.20% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
53 Neutral | $1.30B | ― | -15.06% | ― | 1.76% | 34.61% | |
51 Neutral | $404.43M | ― | -20.72% | ― | -3.63% | 31.61% | |
48 Neutral | $6.82B | -20.03 | -3.61% | 2.10% | -6.67% | -168.27% | |
48 Neutral | C$122.05M | -5.65 | -12.20% | ― | 2.06% | -46.23% |
* Basic Materials Sector Average
TSE:WFG
West Fraser Timber Co
86.24
-43.95
-33.76%
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15.66
-1.31
-7.72%
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-1.03
-8.08%
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12.73
17.51%
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-54.70%
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West Fraser Timber Co Corporate Events
Business Operations and StrategyFinancial Disclosures
West Fraser Announces Indefinite Curtailment of OSB Mill Amid Weakening Demand
Negative
Dec 4, 2025
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.
Business Operations and StrategyFinancial Disclosures
West Fraser Timber Co. Announces Q3 Results Conference Call
Neutral
Oct 2, 2025
West Fraser Timber Co. Ltd. announced it will hold a conference call on October 23, 2025, to discuss its third quarter financial and operating results. This announcement indicates the company’s ongoing transparency and engagement with stakeholders, as it provides an opportunity for analysts to inquire about the company’s performance and strategic direction.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.