Key Morningstar Metrics for Canfor
- : C$17.00Fair Value Estimate
- : ★★★★Morningstar Rating
- : NoneMorningstar Economic Moat Rating
- : HighMorningstar Uncertainty Rating
What We Thought of Canfor’s Earnings
Canfor CFP reported a fourth-quarter 2025 adjusted operating loss of C$145 million versus a C$82 million loss in the prior-year quarter. A new 10% tariff from the United States, lower North American demand, and downtime for normal seasonal maintenance drove the loss.
Why it matters: Canfor’s struggles exceed what it can control with soft US housing and tariffs. As announced Feb. 17, the company recorded a C$320.4 million non-cash impairment charge with C$213.9 million in lumber, C$54 million in pulp, and a C$52.5 million deferred tax asset writeoff.
- There were a few bright spots for lumber, with Europe shipments increasing versus the third quarter on the end of summer shutdowns, plus a full quarter from the Hedin acquisition in September. Low North American inventory on industry production curtailments led to modest price rises near quarter-end.
- Canfor will shortly acquire the 45.2% of Canfor Pulp Products it does not already own, as discussed in our Dec. 4 note. Canfor said on March 6 that it’s highly probable CPPI will break its March 31 financial covenants if shareholders reject the acquisition in a March 6 vote.
The bottom line: We are leaving our no-moat rating and C$17 per share fair value estimate unchanged, but we will reassess all modeling inputs after we roll our model forward a year. Canfor is in a tough spot, with 2026 unlikely to be a strong year in our view, but it holds C$1.2 billion in total liquidity.
- The CPPI deal should not prevent Canfor from making a 2026 acquisition, should the opportunity present itself, as we estimate the cost will be roughly C$15 million. Canfor’s 2026 capital spending budget is about C$210 million, with 40% of that discretionary.
- We see heightened US macroeconomic risk in light of a poor February jobs report and the Iran war’s threat to consumer confidence. Although we don’t consider Canfor to be in danger of distress, we have low expectations for 2026 results.
