The Globe and Mail reports in its Thursday edition that Canadian forestry companies are set to report explosive first-quarter profit growth this week. The Globe's David Berman writes that the sector has been on a volatile ride over much of the past six months as the stock market weighs lofty commodity prices and a busy housing market against rising interest rates and fears of a recession. West Fraser Timber is typical. From recent highs in early March, the stock price slid 26 per cent by early April. It has rebounded about 20 per cent over the past three weeks, leaving the stock down more than 8 per cent in 2022. Some observers expect that the company's quarterly financial results, which will be released after markets close today, could renew investor enthusiasm. "The market seems not interested, but the earnings from the tree stocks is real. And look at their balance sheets: no debt and lots of cash," said analyst John Duncanson at Corton Capital. Forest companies could generate a full year's worth of earnings in just one quarter, according to Daryl Swetlishoff, an analyst at Raymond James, thanks to rising demand from U.S. homebuilders. Mr. Swetlishoff expects West Fraser's earnings to increase 220 per cent.
© 2023 Canjex Publishing Ltd. All rights reserved.