Canada's Canfor Q2 loss narrows as lumber markets improve

Overview

• Canada forest products maker's Q2 revenue rose yr/yr, returning to operating income

• Company posted net loss for Q2, but loss narrowed from prior year

• Canfor announced permanent closures of mills in Sweden and Canada, and acquired PinkWood Ltd

Outlook

• Canfor expects North American lumber markets to moderate later in Q3 2026

• Company projects continued weak lumber demand in Asia through Q3 2026

• Canfor anticipates global softwood pulp markets to remain under pressure in Q3 2026

Result Drivers

• LUMBER SEGMENT IMPROVEMENT - Co said improved results in the lumber segment were mainly due to higher benchmark prices, increased production, and lower manufacturing and product costs

• SEASONAL DEMAND TIGHTER SUPPLY - North American lumber prices modestly improved due to seasonal demand, lean inventories, and constrained transportation capacity

• PULP SEGMENT WEAKNESS - Lower pulp shipments and production, along with subdued global demand and elevated inventories, weighed on pulp and paper segment results

Company press release: ID:nGNX7Pz7sH

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the forest wood products peer group is "buy."

• Wall Street's median 12-month price target for Canfor Corp is C$15.75, about 12.8% above its July 28 closing price of C$13.96

Reuters Recommended Reads

• July 29 - Canada's West Fraser Timber Q2 sales rise sequentially, output at Henderson sawmill more than double

• July 29 - UFP Industries Q2 sales beat estimates on acquisitions, new products sales

• July 28 - Clearwater Paper Q2 net loss widens as facility outage weighed on results

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)