The Globe and Mail reports in its Thursday, April 27, edition that Raymond James analyst Daryl Swetlishoff recommends taking advantage of share price weakness at West Fraser Timber. The Globe's Darcy Keith writes in the Eye On Equities column that Mr. Swetlishoff continues to target the shares at $145. Mr. Keith notes that West Fraser Timber's latest quarterly earnings were a miss relative to Street expectations. Mr. Swetlishoff, however, sees tighter forest products markets on tap for the second half of this year and is urging investors to buy the dip. Mr. Swetlishoff says in a note: "The largest, most liquid stock in our coverage universe with attractive product and geographic exposure, West Fraser is a go to for investors seeking building products exposure. Inventory write down impacts and weak quarterly OSB (oriented strand board) prices drove an adj. EBITDA miss of $71-million (vs. consensus at $103-million) though adj. lumber earnings turned positive on sequential cost improvements. Net cash levels roughly halved q/q coming in at $309-million (U.S.), however, we highlight the bulk of this is driven by Western Canadian inventory builds -- which typically reverse in the back half of the year."
© 2023 Canjex Publishing Ltd. All rights reserved.