West Fraser Timber Co Ltd T.WFG

CIBC Raises Target

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CIBC World Markets analyst Hamir Patel made these target adjustments:

• West Fraser Timber Co. Ltd. ( “outperformer”) to $140 from $131. Average: $138.15.

“On the wood products side, our preferred name is West Fraser given its exposure to OSB (half the company’s business), a commodity which has seen a steep pricing rally year-to-date (up 30 per cent to up 65 per cent) given healthy new res demand (57 per cent of OSB consumption) and the delayed start-up of two large mills that were supposed to come online in Q4/23 and Q1/24. We also have Outperformer ratings on Canfor and Interfor. Although mid-cycle valuations remain compelling for the LumberCos, Q1 earnings are likely going to show further balance sheet deterioration across the group. At the same time, lumber prices continue to erode (particularly in the normally lucrative U.S. South where mills are barely above breakeven right now)