Canfor Earnings: Weak North American Lumber Markets Widen Operating Losses

No-moat-rated Canfor reported lackluster second-quarter earnings as the company continued to navigate challenging lumber markets. Net sales fell 4.5% year over year while the company reported a CAD 250 million operating loss, largely due to weakness in its lumber business. The higher-for-longer interest rate environment continues to weigh on Canfor and its competitors as housing markets remain largely stagnant. As such, we've decreased our fair value estimate to CAD 20 per share from CAD 23 due to our expectation for softer near-term lumber demand.