Homebuilder comments
Here's a full-on breakdown of comments from all the largest home builders and a reno retailer: https://www.forexlive.com/news/is-us-housing-headed-for-a-u-turn-heres-what-homebuilders-have-to-say-20220429/
Also, here are comments from Scotia on WFG on the lumber side:
Lumber. Adj. EBITDA came in at $787M vs. $190M last quarter (after $36M and $20M of export duties paid, respectively) and our $873M estimate. Adjusted EBITDA margins came up to 53% during the quarter (after duties) compared to 22% in Q4/21 and 51% in Q1/21. On a q/q basis, SPF shipments were down 8% to 619 MMfbm (vs. our 610 MMfbm forecast) due to transporation challenges in Western Canada, while SYP shipments increased significantly by 19% to 750 MMfbm (vs. our 680 MMfbm forecast). Lumber prices were also higher on a q/q basis due to strong demand from the housing sector and tightness in lumber supplies caused by transportation issues. On a q/q basis, Adj. EBITDA was supported by stronger prices (+$541M), higher volumes (+$47M), and lower costs (+$30M), partially offset by higher duties (-$16M), and higher other expenses (-$5M). Compared to our forecast, higher shipments (+$64M) and lower duties (+$8M) were more than offset by lower realized prices (-$143M), higher-than-expected manufacturing costs (-$10M).
They forecast lumber at $561 next year and still have WFG earning $1790 in EBITDA along with 902m in free cash.
They also said WFG could afford another 15% buyback next year.
The money in this sector is bananas.