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West Fraser Timber Co (TSE:WFG)
TSX:WFG
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West Fraser Timber Co
(TSX:WFG)
Rating:64Neutral
Price Target:
C$111.00
▲(7.40%Upside)
West Fraser Timber Co (WFG) vs. iShares MSCI Canada ETF (EWC)
Market Cap
$8.29B
Dividend Yield1.67%
Average Volume (3M)140.34K
Price to Earnings (P/E)3170.2
Beta (1Y)0.91
Revenue Growth-4.04%
EPS GrowthN/A
CountryCA
Employees9,700
SectorBasic Materials
Sector Strength66
IndustryPaper, Lumber & Forest Products
Share Statistics
EPS (TTM)0.64
Shares Outstanding77,015,594
10 Day Avg. Volume176,921
30 Day Avg. Volume140,341
Financial Highlights & Ratios
PEG Ratio-0.16
Price to Book (P/B)0.89
Price to Sales (P/S)0.00
P/FCF Ratio3.91
Enterprise Value/Market Cap0.74
Enterprise Value/Revenue0.25
Enterprise Value/Gross Profit3.39
Enterprise Value/Ebitda2.24
Forecast
1Y Price Target
$130.88Price Target Upside26.64% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
West Fraser Timber Co Business Overview & Revenue Model
Company DescriptionWest Fraser Timber Co. Ltd. (WFG) is a leading diversified wood products company with operations primarily in Canada, the United States, and Europe. The company is engaged in the manufacturing of various wood products including lumber, engineered wood products, and pulp and paper. West Fraser is recognized for its sustainable forestry practices and commitment to producing high-quality wood products that serve a wide range of industries, including construction, manufacturing, and energy.
How the Company Makes MoneyWest Fraser Timber Co. makes money primarily through the sale of its wood products, which include lumber, plywood, oriented strand board (OSB), and medium-density fiberboard (MDF). The company's revenue model is largely based on the demand for these products in the construction and home-building sectors. Additionally, West Fraser generates income from its pulp and paper segment, which supplies materials for packaging, tissue, and other paper products. Key revenue streams include domestic sales within North America and international exports. The company's financial performance is influenced by factors such as lumber pricing, housing market trends, and its ability to manage costs through efficient operations and sustainable forestry practices.
West Fraser Timber Co Earnings Call Summary
Earnings Call Date:Apr 22, 2025
(Q1-2025)
| % Change Since: 0.40%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong performance in the Lumber segment and a solid financial position, but also noted challenges such as negative cash flow, tariff uncertainty, and a slow start to the year for key segments. The sentiment is balanced with both positive achievements and significant challenges.Q1-2025 Updates
Positive Updates
Record Lumber Segment Performance
The Lumber segment had its best result in more than two years, contributing significantly to overall profitability with $66 million adjusted EBITDA, a substantial increase from $21 million in the previous quarter.
Strong Liquidity and Balance Sheet
West Fraser exited Q1 with nearly $1.5 billion of available liquidity and a healthy cash position net of debt, supporting its capital allocation strategy.
Improved Overall EBITDA
Adjusted EBITDA improved to $195 million in Q1 2025, representing a 13% margin, an increase from $561 million to $668 million over the trailing 12 months.
Negative Updates
Cash Flow and Working Capital Challenges
Cash flow from operations was negative $75 million for Q1 due to the seasonal build of working capital from winter logging operations, and a decrease in cash balance from $641 million to $390 million.
Tariff and Trade Policy Uncertainty
Uncertainty of tariffs and potential inflationary effects pose risks to future demand and operations, with preliminary combined tariff rates for AR6 at 26.05%.
Slow Start to 2025 for Lumber and OSB Segments
Both Lumber and North American OSB segments experienced a slower-than-expected start due to transportation and weather-related challenges, leading to a conservative reduction in shipment guidance.
European Segment Performance
The European business realized a negative $2 million adjusted EBITDA in Q1, compared to a positive $2 million in the previous quarter, primarily due to pricing pressures.
Company Guidance
During the Q1 2025 earnings call, West Fraser provided guidance indicating a conservative reduction in the top end of their 2025 shipments guidance for SPF, SYP, and OSB due to a slower-than-expected start to the year, primarily attributed to transportation and weather-related challenges. The company reported $195 million of adjusted EBITDA in Q1, representing a 13% margin, with the Lumber segment achieving its best result in over two years. Despite generating $668 million of adjusted EBITDA over the trailing 12 months, they highlighted macroeconomic uncertainties, particularly from evolving U.S. tariff policies. West Fraser maintained a strong balance sheet with $1.5 billion in liquidity at the end of Q1, emphasizing their readiness to navigate potential challenges and pursue growth opportunities. The preliminary combined duties for AR6 were reported at 26.05%, the lowest in the Canadian industry, with final rates expected in the second half of the year.West Fraser Timber Co Financial Statement Overview
Summary
West Fraser Timber Co shows solid financial stability with a strong balance sheet, low leverage, and high equity ratio. Despite declining revenue and profit margins, the company maintains positive cash flows and profitability, supported by a high free cash flow to net income ratio.Income Statement
West Fraser Timber Co has shown a decline in total revenue from $10.5B in 2021 to $6.0B in TTM (Trailing-Twelve-Months) 2025. The gross profit margin for the TTM period stands at 30.1%, with a slight improvement in EBIT margin from -4.4% in 2023 to 0.4% in TTM 2025. Net profit margin remains low at 0.03% for TTM 2025. Despite the decline in revenue, the company has managed to maintain profitability, although at a reduced level.65
Positive
Balance Sheet
The balance sheet reflects a strong equity position with a debt-to-equity ratio of 0.03 in TTM 2025, indicating low leverage. The equity ratio is high at 79.1%, suggesting a stable financial structure. Stockholders' equity remains strong, providing a solid foundation for potential growth.78
Positive
Cash Flow
The company's operating cash flow was $626M in TTM 2025, ensuring sufficient liquidity. The free cash flow to net income ratio is robust at 78.5, but free cash flow has decreased compared to previous periods. The operating cash flow to net income ratio is exceptionally high, indicating efficient cash generation relative to net income.70
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 6.01B | 6.17B | 6.45B | 9.70B | 10.52B | 4.59B | Gross Profit |
| 1.81B | 1.84B | 1.77B | 4.56B | 5.87B | 1.89B | EBIT |
| 23.00M | 7.00M | -284.00M | 2.56B | 3.94B | 861.07M | EBITDA |
| 622.00M | 614.00M | 337.00M | 4.17B | 5.68B | 1.36B | Net Income Common Stockholders |
| 2.00M | -5.00M | -167.00M | 1.98B | 2.95B | 588.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 390.00M | 641.00M | 900.00M | 1.16B | 1.57B | 460.33M | Total Assets |
| 8.77B | 8.76B | 9.41B | 9.97B | 10.43B | 4.17B | Total Debt |
| 224.00M | 229.00M | 538.00M | 536.00M | 510.00M | 507.39M | Net Debt |
| -166.00M | -412.00M | -362.00M | -626.00M | -337.00M | 73.39M | Total Liabilities |
| 1.83B | 1.81B | 2.19B | 2.35B | 2.78B | 1.70B | Stockholders Equity |
| 6.94B | 6.95B | 7.22B | 7.62B | 7.66B | 2.47B |
| Cash Flow | Free Cash Flow | ||||
| 157.00M | 174.00M | 48.00M | 1.73B | 2.92B | 826.56M | Operating Cash Flow |
| 626.00M | 661.00M | 525.00M | 2.21B | 3.55B | 1.02B | Investing Cash Flow |
| -310.00M | -318.00M | -530.00M | -459.00M | -286.00M | ― | Financing Cash Flow |
| -625.00M | -582.00M | -268.00M | -2.13B | -2.16B | ― |
West Fraser Timber Co Technical Analysis
Neutral
103.35
Price Trends
102.85
Positive
109.18
Negative
118.40
Negative
Market Momentum
0.12
Negative
50.62
Neutral
67.61
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 103.35 is above the 20-day moving average (MA) of 102.60, above the 50-day MA of 102.85, and below the 200-day MA of 118.40, indicating a neutral trend. The MACD of 0.12 indicates Negative momentum. The RSI at 50.62 is Neutral, neither overbought nor oversold. The STOCH value of 67.61 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
Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $4.25B | 12.83 | 18.06% | 1.62% | 4.52% | 0.51% | |
75 Outperform | C$320.88M | 16.17 | 5.85% | 6.50% | 12.30% | -36.60% | |
64 Neutral | $8.29B | 3,170.25 | 0.03% | 1.67% | -4.04% | ― | |
54 Neutral | $1.63B | ― | -18.19% | ― | -2.51% | -157.38% | |
53 Neutral | C$126.70M | ― | -1.51% | ― | 9.47% | 85.29% | |
51 Neutral | $2.03B | -1.27 | -21.09% | 3.98% | 2.91% | -30.50% | |
44 Neutral | $674.04M | ― | -16.90% | ― | -10.70% | 10.74% |
* Basic Materials Sector Average
Performance Comparison
TSE:WFG
West Fraser Timber Co
103.35
-3.20
-3.00%
TSE:IFP
Interfor
13.10
-4.94
-27.38%
TSE:SJ
Stella-Jones
76.52
-7.21
-8.61%
TSE:CFP
Canfor
13.84
-1.23
-8.16%
TSE:WEF
Western Forest Prod
0.40
-0.10
-20.00%
TSE:ADN
Acadian Timber
17.84
1.82
11.36%
West Fraser Timber Co Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
West Fraser Enhances Liquidity with Credit Facility Renewal
Positive
Jun 2, 2025
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.
Business Operations and Strategy
West Fraser Releases 2024 Sustainability Report Highlighting Key Achievements
Positive
May 22, 2025
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.
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.