TD Securities has revised its price target for West Fraser Timber (WFG, Financial), lowering it slightly from $99 to $98 while maintaining a Buy rating on the stock. Despite the company's first-quarter performance exceeding expectations, the firm has updated its future estimates up to 2026 due to anticipated decreases in shipment volumes.
Ongoing economic uncertainty and concerns regarding U.S. market access, particularly related to the ongoing Section 232 investigation, have impacted investor sentiment. Nevertheless, West Fraser's robust balance sheet and varied operations are seen as factors that help mitigate these risks, according to TD Securities.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 2 analysts, the average target price for West Fraser Timber Co.Ltd (WFG, Financial) is $94.50 with a high estimate of $99.00 and a low estimate of $90.00. The average target implies an upside of 28.87% from the current price of $73.33. More detailed estimate data can be found on the West Fraser Timber Co.Ltd (WFG) Forecast page.
Based on the consensus recommendation from 2 brokerage firms, West Fraser Timber Co.Ltd's (WFG, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for West Fraser Timber Co.Ltd (WFG, Financial) in one year is $76.06, suggesting a upside of 3.72% from the current price of $73.33. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the West Fraser Timber Co.Ltd (WFG) Summary page.
WFG Key Business Developments
Release Date: April 23, 2025
- Adjusted EBITDA (Q1 2025): $195 million, representing a 13% margin.
- Trailing 12 Months Adjusted EBITDA: $668 million, with an 11% margin.
- Lumber Segment Adjusted EBITDA (Q1 2025): $66 million, up from $21 million in Q4 2024.
- North America EWP Segment Adjusted EBITDA (Q1 2025): $125 million, similar to $127 million in Q4 2024.
- Pulp & Paper Segment Adjusted EBITDA (Q1 2025): $7 million, compared to a $10 million loss in Q4 2024.
- European Business Adjusted EBITDA (Q1 2025): Negative $2 million, down from $2 million in Q4 2024.
- Cash Flow from Operations (Q1 2025): $75 million.
- Cash Balance (End of Q1 2025): $390 million, down from $641 million in Q4 2024.
- Available Liquidity (End of Q1 2025): Nearly $1.5 billion.
- Capital Expenditures (Q1 2025): $104 million.
- Share Buybacks and Dividends (Q1 2025): Approximately $72 million.
- Preliminary Combined Duty Rate (AR6): 26.05% (CBD rate of 16.57% and ADD rate of 9.48%).
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- West Fraser Timber Co.Ltd (WFG, Financial) reported a significant improvement in adjusted EBITDA, reaching $195 million in Q1 2025, with a 13% margin.
- The lumber segment achieved its best result in over two years, driven by improved SPF demand and pricing.
- The company maintains a strong balance sheet with nearly $1.5 billion in available liquidity and a healthy cash position.
- The North America EWP segment continued to lead in EBITDA generation, contributing $125 million in Q1.
- West Fraser Timber Co.Ltd (WFG) has a diversified product and geographic footprint, providing resilience against market uncertainties.
Negative Points
- The company faces macroeconomic uncertainty, particularly due to evolving US tariff policies, which could impact operations.
- Weather-related transportation disruptions in the US South affected SYP shipment volumes.
- The European business reported a negative $2 million adjusted EBITDA in Q1, primarily due to pricing challenges.
- Tariff uncertainties and potential inflationary effects could affect future demand for wooden building products.
- Log shortages in the SPF business due to warm weather in Western Canada impacted operations.
