12 Best Land and Timber Stocks to Buy According to Analysts

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9. UFP Industries Inc. (NASDAQ:UFPI)

Average Price Target Upside Potential According to Analysts: 17.15%

Number of Hedge Fund Holders: 22

UFP Industries Inc. (NASDAQ:UFPI), formerly known as Universal Forest Products, is a leading manufacturer and distributor of products for construction, packaging, and industrial applications. The company operates over 200 facilities worldwide and is a key supplier of lumber to the manufactured housing industry. As a leading manufacturer and distributor of wood products, the company is committed to protecting forests while sourcing lumber from around the globe.

For Q3 2024, UFP Industries Inc. (NASDAQ:UFPI) reported net sales of $1.65 billion, a 10% decrease year-over-year. This decline was primarily due to a 3% drop in organic unit sales and a 7% reduction in selling prices, largely driven by a significant 21% decrease in the price of Southern Yellow Pine, which accounts for about two-thirds of the company’s lumber purchases. The challenging market conditions have put pressure on both revenue and profit margins.

To navigate these challenges, the company is implementing strategic initiatives aimed at improving efficiency and reducing costs. UFP Industries Inc. (NASDAQ:UFPI) plans to consolidate facilities to enhance capacity utilization and is exploring options for certain business units that do not align with its long-term goals. Through these measures, UFP Industries Inc. (NASDAQ:UFPI) expects to achieve annual cost reductions exceeding $70 million.

Looking ahead, UFP Industries Inc. (NASDAQ:UFPI) is focused on growth and plans to invest approximately $1 billion over the next five years in strategic acquisitions and organic growth opportunities. This includes investments of $300 million towards automation, technology upgrades, and capacity expansion in 2024. With its proactive management strategies, commitment to sustainability, and strong investment plans, UFP Industries Inc. (NASDAQ:UFPI) presents an attractive investment opportunity. The combination of cost-cutting measures and significant capital investment positions the company for future growth despite current market challenges.

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