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Bullboard - Stock Discussion Forum Canfor Corp T.CFP

Alternate Symbol(s):  CFPZF

Forest Products Lumber & Wood Production
Canfor Corporation is engaged in the manufacturing of high-value low-carbon forest products, including dimension and specialty lumber, engineered wood products, pulp and paper, wood pellets, and green energy. The Company’s segments include lumber and pulp and paper. It produces renewable products from sustainably managed forests at more than 50 facilities across its diversified operating... see more

TSX:CFP - Post Discussion

Canfor Corp > We believe the company should trade below the low end
View:
Post by carbide on Nov 02, 2023 1:04am

We believe the company should trade below the low end

Canfor Corporation
Valuation
Our price target of $27 supports our Outperform rating. We value Canfor based on a 4.25x blended valuation multiple using our Trend EBITDA estimate of $875MM (85% weighting) and our 2024 EBITDA estimate of $415MM (15% weighting). We believe the company should trade below the low end of the typical range for Canadian Paper and Forest Products companies (5.0x to 7.0x),
due to the company’s heavier exposure to BC and an uncertain capital allocation strategy.

-Paul Quinn, RBC

The company is bleeding cash in BC, and all the M&A is draining cash from company coffers.

Quinn has a more upbeat appraisal of West Fraser, where he notes:

"strong operational performance, a solid balance sheet, and an emphasis on returning capital to shareholders"

The contrast in management performance and capital allocation is not lost on analysts.
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Canfor Corp