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West Fraser Timber Co (TSE:WFG)
TSX:WFG

West Fraser Timber Co (WFG) AI Stock Analysis

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West Fraser Timber Co

(TSX:WFG)

Rating:63Neutral
Price Target:
C$108.00
▲( 7.40% Upside)
West Fraser's overall score reflects its strong balance sheet and sustainability efforts, countered by high valuation concerns and technical indicators suggesting bearish momentum. The earnings call highlights both opportunities and significant risks, particularly from tariff uncertainty and cash flow challenges.

West Fraser Timber Co (WFG) vs. iShares MSCI Canada ETF (EWC)

West Fraser Timber Co Business Overview & Revenue Model

Company DescriptionWest 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 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 Financial Statement Overview

Summary
West Fraser Timber Co demonstrates a solid financial position with low leverage and strong equity. While revenue and profit margins have decreased over recent years, the company has maintained positive cash flows and profitability. The balance sheet strength provides a buffer against market volatility, but there are challenges in revenue growth and profitability to address.
Income Statement
65
Positive
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.
Balance Sheet
78
Positive
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.
Cash Flow
70
Positive
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.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
6.01B6.17B6.45B9.70B10.52B4.59B
Gross Profit
1.81B1.84B1.77B4.56B5.87B1.89B
EBIT
23.00M7.00M-284.00M2.56B3.94B861.07M
EBITDA
622.00M614.00M337.00M4.17B5.68B1.36B
Net Income Common Stockholders
2.00M-5.00M-167.00M1.98B2.95B588.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
390.00M641.00M900.00M1.16B1.57B460.33M
Total Assets
8.77B8.76B9.41B9.97B10.43B4.17B
Total Debt
224.00M229.00M538.00M536.00M510.00M507.39M
Net Debt
-166.00M-412.00M-362.00M-626.00M-337.00M73.39M
Total Liabilities
1.83B1.81B2.19B2.35B2.78B1.70B
Stockholders Equity
6.94B6.95B7.22B7.62B7.66B2.47B
Cash FlowFree Cash Flow
157.00M174.00M48.00M1.73B2.92B826.56M
Operating Cash Flow
626.00M661.00M525.00M2.21B3.55B1.02B
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

Technical Analysis Sentiment
Negative
Last Price100.56
Price Trends
50DMA
105.23
Negative
100DMA
112.63
Negative
200DMA
119.44
Negative
Market Momentum
MACD
-0.70
Positive
RSI
40.25
Neutral
STOCH
2.47
Positive
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 100.56 is below the 20-day moving average (MA) of 103.13, below the 50-day MA of 105.23, and below the 200-day MA of 119.44, indicating a bearish trend. The MACD of -0.70 indicates Positive momentum. The RSI at 40.25 is Neutral, neither overbought nor oversold. The STOCH value of 2.47 is Positive, 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 (50)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSADN
75
Outperform
C$320.70M16.175.85%6.49%12.30%-36.60%
TSWFG
63
Neutral
$7.97B3,084.660.03%1.75%-4.04%
TSWEF
59
Neutral
C$126.70M-1.51%9.47%85.29%
50
Neutral
$1.99B-1.06-21.34%3.71%2.03%-30.65%
$3.02B12.6418.06%1.55%
$458.86M-16.90%
$1.10B-18.19%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:WFG
West Fraser Timber Co
100.56
-9.49
-8.63%
TSE:ADN
Acadian Timber
17.84
1.46
8.91%
TSE:WEF
Western Forest Prod
0.40
-0.10
-20.00%
STLJF
Stella-Jones
54.54
-5.88
-9.73%
IFSPF
Interfor
8.91
-4.57
-33.90%
CFPZF
Canfor
9.41
-1.96
-17.24%

West Fraser Timber Co Earnings Call Summary

Earnings Call Date:Apr 22, 2025
(Q1-2025)
|
% Change Since: -2.31%|
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 Corporate Events

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
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.