West Fraser Timber Co (WFG) AI Stock Analysis

• Market Cap: $8.29B
• Dividend Yield: 1.74%
• Average Volume (3M): 413.47K
• Price to Earnings (P/E): 3150.3
• Beta (1Y): 0.97
• Revenue Growth: -8.30%
• EPS Growth: -191.60%
• Country: CA
• Employees: 9,700
• Sector: Basic Materials
• Sector Strength: 66
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): -0.53
• Shares Outstanding: 76,562,780
• 10 Day Avg. Volume: 729,065
• 30 Day Avg. Volume: 413,474
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.90
• Enterprise Value/Revenue: 1.28
• Enterprise Value/Gross Profit: 4.63
• Enterprise Value/Ebitda: 17.31
• 1Y Price Target: $123.98
• Price Target Upside: 20.59% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 53 Neutral
• Price Target: C$106.00 ▲(3.10% Upside)

West Fraser Timber Co's overall score reflects significant financial challenges, including declining profitability and cash flow issues. While the balance sheet is strong, the negative P/E ratio and market challenges highlighted in the earnings call weigh heavily on the score. Technical indicators suggest some stability, but valuation concerns persist.

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 wood products, with key revenue streams including lumber sales, engineered wood products, and by-products such as wood chips and sawdust. The company benefits from its diversified product offerings, allowing it to serve a wide range of customers in the construction and manufacturing industries. Additionally, West Fraser engages in strategic partnerships and joint ventures that enhance its supply chain and market reach. Factors contributing to its earnings include fluctuations in lumber prices, demand in the housing market, and the company's ability to efficiently manage its production processes while maintaining sustainable forestry practices.

West Fraser Timber Co Financial Statement Overview

Summary

West Fraser Timber Co is facing financial headwinds with declining revenues and profitability. The balance sheet is strong with low leverage, but negative return on equity and declining cash flows are concerning. Operational inefficiencies and cash generation need improvement.

Income Statement

West Fraser Timber Co has experienced declining revenue and profitability over recent periods. The TTM data shows a negative net profit margin of -2.18% and a negative EBIT margin of -1.87%, indicating operational challenges. The gross profit margin remains moderate at 27.77%, but revenue growth has been negative, reflecting a contraction in sales.

Balance Sheet

The company's balance sheet is relatively stable with a low debt-to-equity ratio of 0.05, suggesting conservative leverage. However, the return on equity is negative at -1.82%, indicating inefficiencies in generating returns for shareholders. The equity ratio is strong, showing a solid foundation of equity relative to total assets.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth, down by 43.95% in the TTM period. The operating cash flow to net income ratio is 0.80, indicating some challenges in converting income into cash. The free cash flow to net income ratio is 0.17, suggesting limited cash generation relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.83B	6.17B	6.45B	9.70B	10.52B	4.59B
Gross Profit	1.62B	1.84B	1.77B	4.56B	5.87B	1.89B
EBITDA	433.00M	614.00M	337.00M	4.17B	5.68B	1.36B
Net Income	-127.00M	-5.00M	-167.00M	1.98B	2.95B	588.00M
Balance Sheet
Total Assets	8.77B	8.76B	9.41B	9.97B	10.43B	4.17B
Cash, Cash Equivalents and Short-Term Investments	646.00M	641.00M	900.00M	1.16B	1.57B	460.33M
Total Debt	329.00M	229.00M	538.00M	536.00M	510.00M	507.39M
Total Liabilities	1.87B	1.81B	2.19B	2.35B	2.78B	1.70B
Stockholders Equity	6.90B	6.95B	7.22B	7.62B	7.66B	2.47B
Cash Flow
Free Cash Flow	88.00M	174.00M	48.00M	1.73B	2.92B	826.56M
Operating Cash Flow	533.00M	661.00M	525.00M	2.21B	3.55B	1.02B
Investing Cash Flow	-408.00M	-318.00M	-530.00M	-459.00M	-286.00M	―
Financing Cash Flow	-483.00M	-582.00M	-268.00M	-2.13B	-2.16B	―

West Fraser Timber Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 102.81
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• 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 102.81 is above the 20-day moving average (MA) of 101.79, above the 50-day MA of 101.02, and below the 200-day MA of 110.30, indicating a neutral trend. The MACD of 0.49 indicates Negative momentum. The RSI at 53.53 is Neutral, neither overbought nor oversold. The STOCH value of 81.50 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
Sector *	61 Neutral	$10.41B	7.18	-0.06%	2.87%	2.87%	-36.73%
ADN	60 Neutral	C$317.34M	21.98	4.24%	8.55%	-26.79%	-57.05%
WFG	53 Neutral	$8.29B	3,150.31	-1.80%	1.74%	-8.30%	-191.60%
WEF	48 Neutral	C$130.92M	―	-3.84%	―	3.89%	49.05%
STLJF	―	$3.21B	13.54	17.05%	1.46%	―	―
IFSPF	―	$493.93M	―	-11.53%	―	―	―
CFPZF	―	$1.15B	―	-19.38%	―	―	―

West Fraser Timber Co Corporate Events

West Fraser Enhances Liquidity with Credit Facility Renewal

West Fraser Timber Co. Ltd. has announced the renewal and extension of its $1 billion credit facility to May 2030 and an increase in its term loan to $300 million, maturing in May 2028. This strategic financial move enhances the company’s liquidity and financial flexibility, positioning it strongly for future operations and stability in the wood products industry.

The most recent analyst rating on (TSE:WFG) stock is a Buy with a C$125.00 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 Releases 2024 Sustainability Report Highlighting Key Achievements

West Fraser Timber Co. Ltd. has released its 2024 Sustainability Report, highlighting significant achievements in environmental, social, and governance goals. Key accomplishments include enhanced safety training, a substantial reduction in carbon emissions, sustainable forest management, partnerships with Indigenous Nations, and community investments. These initiatives underscore West Fraser’s commitment to sustainability and responsible resource management, potentially strengthening its industry position and stakeholder relationships.

The most recent analyst rating on (TSE:WFG) stock is a Buy with a C$125.00 price target. To see the full list of analyst forecasts on West Fraser Timber Co stock, see the TSE:WFG Stock Forecast page.