Join        Login             Stock Quote

International Forest Products Initiated As 'Sector Outperformer' By CIBC, $6.50 PT

 March 01, 2012 12:13 PM

CIBC World Markets Inc. analyst Mark Kennedy initiated coverage of International Forest Products Ltd. (TSE:IFP.A) with a "Sector Outperformer" rating and $6.50 target price.

The company is a diversified lumber producer with annual capacity of 1.65 billion fbm, Kennedy noted.

U.S. housing market fundamentals continue to slowly improve and point to improving new home construction as well as increasing repair and renovation expenditures over the next two years. Kennedy believes house pricing is one key fundamental that needs to find a bottom in the coming months.

The company ships nearly 40% of its lumber volume to Asian markets (primarily China and Japan) and is well positioned to capitalize on continuing lumber demand growth in this region. The company also has controlled exposure to the Mountain Pine Beetle as it impacts only about 11% of its lumber capacity.

[Related -Searching For Solid Support In The Face Of Global Headwinds]

The company has low leverage at 20.4% debt to cap and trades at an inexpensive EV/EBITDA multiple of 2.5 times based on mid - cycle lumber pricing. While initial price target is $6.50, Kennedy believes this stock could trade close to its NAV of $9.26 over the 2- to 3-year course of the next lumber cycle.

The brokerage introduced its 2012 loss per share estimate for IFP.A of $0.17 and its 2013 EPS estimate of $0.11.

IFP.A is trading up 1.95% at $4.70 on Thursday.

iOnTheMarket Premium


Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageLong-term Relationships and Credit Scores

Unlike many commentators, I tend to think credit scores are a good read on...

article imageIn Defense Of Rolling Return Charts

Robeco’s Lukas Daalder has a bit of an issue with rolling-performance graphics. Bashing a recent chart of read on...

article imageThe S&P 500’s Worrisome Downturn In Drawdown

Last Friday I reviewed some of the bearish signals that were casting dark shadows across the US stock read on...

article imageADP: Private-Sector Employment Rises A Solid 200k In September

The pace of growth for private-sector employment picked up in September, according to this morning’s ADP read on...

Popular Articles

Daily Sector Scan
Partner Center

Related Articles:

In Defense Of Rolling Return Charts
More Articles on: Industrial Products

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.