12 Best Land and Timber Stocks to Buy According to Analysts

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2. West Fraser Timber Co. Ltd. (NYSE:WFG)

Average Price Target Upside Potential According to Analysts: 36.54%

Number of Hedge Fund Holders: 21

West Fraser Timber Co. Ltd. (NYSE:WFG) is a leading Canadian forestry company that produces a diverse range of wood products, including lumber, plywood, medium-density fiberboard, oriented strand board, plywood, pulp, paper, and wood chips. With over 60 facilities across Canada, the US, the UK, and Europe, West Fraser Timber Co. Ltd. (NYSE:WFG) supplies materials for home construction, industrial applications, and paper products. The company emphasizes sustainable forestry practices to ensure responsible management of its resources.

In the third quarter of 2024, West Fraser Timber Co. Ltd. (NYSE:WFG) reported sales of $1.437 billion, down from $1.705 billion in Q2 2024. The adjusted EBITDA was $62 million, reflecting a 4% margin. This decline was partly due to a $32 million export duty related to lumber from the previous year and mixed demand across its product lines. While there was strong demand for Spruce-Pine-Fir (SPF) lumber and engineered wood products, Southern Yellow Pine (SYP) lumber faced challenges due to a slowdown in repair and remodeling markets.

Despite market challenges, the company has a trailing four-quarter adjusted EBITDA of $630, up from the $561 million reported at year-end 2023. Additionally, West Fraser Timber Co. Ltd. (NYSE:WFG) maintains a robust financial position with over $2 billion in liquidity at the end of the third quarter. The company repurchased 446,460 shares for $35 million during the third quarter of 2024, showcasing its commitment to returning value to shareholders.

In September 2024, West Fraser Timber Co. Ltd. (NYSE:WFG) announced it would indefinitely curtail operations at its Lake Butler sawmill in Florida due to high fiber costs and weak lumber markets. This strategic move is aimed at aligning production capacity with current demand levels. With its diversified product offerings, strong financial health, and proactive management strategies, West Fraser Timber Co. Ltd. (NYSE:WFG) presents a compelling investment opportunity.

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