West Fraser reports Q2 loss, cuts shipment targets

Overview

• West Fraser Q2 sales miss analysts' expectations, totaling $1.532 bln

• Company reports Q2 loss of $24 mln, and loss per share of $0.38

• Adjusted EBITDA for Q2 at $84 mln, reflecting demand slowdown

Outlook

• West Fraser reduces 2025 lumber shipment targets due to demand uncertainty

• Company lowers 2025 OSB shipment target to 6.3-6.5 bln sq ft

• West Fraser expects stable input costs in H2 2025

• Capital expenditures for 2025 projected at $400 mln to $450 mln

Result Drivers

• DEMAND SLOWDOWN - Spring building activity fell short of expectations, impacting wood-based building products demand, particularly in NA EWP segment

• HOUSING AFFORDABILITY - Ongoing housing affordability challenges and potential higher lumber duties contribute to demand uncertainty

• TRANSPORTATION DISRUPTIONS - Lumber segment faced slower demand due to transportation and weather disruptions earlier in the year

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the forest & wood products peer group is "buy"

• The stock recently traded at 17 times the next 12-month earnings vs. a P/E of 16 three months ago

Press Release: