Canfor Navigates Challenging Operating Environment in Third Quarter; Shares Remain Attractive

No-moat Canfor reported third-quarter results that were largely in line with our expectations. Softening housing demand in the United States and falling lumber prices in the third quarter led to a steep decline in the company's financial results. Revenue declined roughly 1% year over year as end-market demand slowed in North America and Europe. Consolidated operating margins dropped over 1,300 basis points from a year ago to 6.5% due to a steep decline in lumber prices, stagnant shipments, and higher unit manufacturing costs.