Canfor Earnings: Weak Lumber Markets Weigh on Results, but Shares Look Cheap

No-moat-rated Canfor reported second-quarter earnings that were largely in line with our expectations. Revenue declined roughly 33% year over year on lower lumber prices and weak pulp demand. Canfor reported an almost CAD 67 million operating loss in the quarter, a significant decrease year over year but an improvement sequentially. Additionally, Canfor’s lumber business continued to be affected by high operating costs in British Columbia that lower lumber prices have exacerbated. Nevertheless, we maintain our CAD 27 fair value estimate.