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West Fraser Timber Co.Ltd WFG

Morningstar Rating
CAD 109.00 −2.76 (2.47%)
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Company Report

West Fraser Faces a Challenging Year Ahead as Lumber Prices and Demand Remain Muted

West Fraser is one of the largest softwood lumber and oriented strand board, or OSB, producers in the world, with significant production capacity in Canada, southeastern United States, and Europe. New construction and remodeling are the main uses of softwood lumber and OSB products in North America. West Fraser is closely tied to the North American market as it accounts for roughly 85% of sales (70% in U.S. and 15% in Canada). As price-takers, West Fraser and its peers see dramatic profit variations depending on the health of housing markets and overall economic conditions.

Price vs Fair Value

WFG is trading at a 9% discount.
Price
CAD 109.00
Fair Value
CAD 914.00
Uncertainty
High
1-Star Price
CAD 429.00
5-Star Price
CAD 82.00
Economic Moat
Pns
Capital Allocation
Wncrndc

Bulls Say, Bears Say

Bulls

West Fraser’s growing mill capacity in the southeastern U.S. will reduce its exposure to export taxes and trade disputes, allowing increased profit generation.

Bears

West Fraser’s reliance on lumber and OSB profitability could put the firm at risk during times of economic weakness.

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News

Trading Information

Previous Close Price
CAD 111.76
Day Range
CAD 108.50111.84
52-Week Range
CAD 88.61121.64
Bid/Ask
CAD 108.68 / CAD 109.84
Market Cap
CAD 8.90 Bil
Volume/Avg
199,549 / 190,046

Key Statistics

Price/Earnings (Normalized)
34.54
Price/Sales
1.08
Dividend Yield (Trailing)
1.43%
Dividend Yield (Forward)
1.94%
Total Yield
3.31%

Company Profile

West Fraser Timber is a softwood lumber company that also produces wood panels and pulp products. The company produces its wood products globally, with lumber mills in British Columbia, Alberta, Europe, and the southeastern United States. Following its acquisition of Norbord in 2021, West Fraser is now one of the largest oriented strand board, or OSB, producers in the world.
Sector
Basic Materials
Industry
Lumber & Wood Production
Stock Style Box
Mid Core
Total Number of Employees
10,800

Competitors

Valuation

Metric
WFG
CFP
RYN
Price/Earnings (Normalized)
34.5490.28
Price/Book Value
0.970.502.59
Price/Sales
1.080.354.65
Price/Cash Flow
14.2516.74
Price/Earnings
WFG
CFP
RYN

Financial Strength

Metric
WFG
CFP
RYN
Quick Ratio
1.241.261.77
Current Ratio
2.262.492.26
Interest Coverage
−11.58−12.864.37
Quick Ratio
WFG
CFP
RYN

Profitability

Metric
WFG
CFP
RYN
Return on Assets (Normalized)
2.08%−5.33%1.44%
Return on Equity (Normalized)
2.71%−8.58%2.91%
Return on Invested Capital (Normalized)
2.07%−7.20%2.29%
Return on Assets
WFG
CFP
RYN
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Lumber & Wood Production Industry Comparables

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Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
SVCBF
Svenska Cellulosa AB Class BKxfcj$10.3 Bil
SCABY
Svenska Cellulosa AB ADRNym$10.2 Bil
SSD
Simpson Manufacturing Co IncMrqjt$7.8 Bil
UFPI
UFP Industries IncXjkr$7.1 Bil
WFG
West Fraser Timber Co.LtdGbykrjrgbBqh$6.5 Bil
STLJF
Stella-Jones IncDzqtxlq$3.3 Bil
CFPZF
Canfor CorpLzq$1.4 Bil
IFSPF
Interfor CorpQlmym$684.0 Mil
NWGL
Nature Wood Group Ltd ADRZwwt$248.6 Mil
ACAZF
Acadian Timber CorpPhpgh$223.6 Mil

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