Are Canfor’s (TSX:CFP) Ongoing Losses Reshaping Its Long-Term Competitive Position?

• Canfor reported its second quarter 2025 results, showing sales of C$1,379.4 million and a net loss of C$202.8 million, with basic loss per share widening to C$1.71 compared to a year earlier.
• An important detail is that while net losses continued, the company's year-to-date loss narrowed slightly compared to the previous year, highlighting both ongoing difficulties and incremental progress in reducing losses.
• We’ll explore how Canfor’s continued significant net losses, despite slight year-to-date improvement, could influence its investment outlook going forward.

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Canfor Investment Narrative Recap

To invest in Canfor, you have to believe in an eventual cyclical recovery in global wood product demand and the company's ability to stem losses through cost management and modernization. The recent Q2 report, while showing some year-to-date loss reduction, does not materially shift the most important near-term catalyst of operational improvements, nor does it reduce the key risk, weak global pulp and lumber market fundamentals remain a pressing challenge.

The June 2025 announcement of permanent closures at two U.S. sawmills is directly relevant, as it highlights Canfor’s efforts to trim high-cost production and focus on efficient operations. These measures suggest ongoing attempts to address profitability pressures tied to current market conditions.

But despite operational streamlining, investors should be aware that persistent weak global pulp and lumber prices may continue to weigh on...

Read the full narrative on Canfor (it's free!)

Canfor is projected to reach CA$6.2 billion in revenue and CA$287.4 million in earnings by 2028. This outlook assumes a 5.7% annual revenue growth rate and reflects a CA$934.6 million increase in earnings from the current loss of CA$-647.2 million.

Uncover how Canfor's forecasts yield a CA$17.00 fair value, a 23% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members provided two fair value estimates for Canfor ranging widely from C$3.25 to C$17 per share. While these varied outlooks reflect differing views on the company’s potential, ongoing exposure to weak global market fundamentals remains central to understanding Canfor’s share price challenges.

Explore 2 other fair value estimates on Canfor - why the stock might be worth less than half the current price!

Build Your Own Canfor Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Canfor research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free Canfor research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Canfor's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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