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    Is Canfor (TSX:CFP) Undervalued On Mill Closures And The PinkWood Acquisition?

    Simply Wall St·09/09/2026 14:29:39
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    Canfor (TSX:CFP) has moved into the spotlight after closing higher cost mills in Canada and Sweden and buying PinkWood Ltd., a producer of engineered wood products that broadens the company’s exposure beyond traditional lumber.

    Recent restructuring and the PinkWood acquisition are feeding into price action, with the share price at CA$14.52 and a 7 day share price return of 2.61%. The 30 day share price return is down 7.93%, and the 1 year total shareholder return is 7.24%.

    Compare Canfor's restructuring and diversification story with a curated set of materials players by scanning the list of solid balance sheet and fundamentals (7 results) that may hold up better through lumber price swings.

    Canfor trades at CA$14.52 while analyst and intrinsic value estimates point higher, leaving a wide gap to interrogate. How does that spread look once earnings, losses, and mill closures are priced in?

    DCF Fair Value Signals A Huge Gap For Canfor

    On Simply Wall St’s numbers, Canfor’s share price of CA$14.52 sits far below an SWS DCF model estimate of CA$131.44. This implies a very large discount to that cash flow based fair value.

    The SWS DCF model projects future cash flows for the business and then discounts those back to today using a required rate of return, which aims to reflect risk and the time value of money. That approach focuses on the cash Canfor could generate over many years rather than short term earnings, which can be volatile for a cyclical materials producer.

    For a lumber and pulp group that is currently loss making, a cash flow based framework can matter more than headline profit metrics. Reported net income of a CA$653.5m loss can be heavily affected by mill closures, impairments, and other one off restructuring items. The DCF output effectively asks what the underlying assets and future revenue base of CA$5,427.6m might be worth if operations stabilise over time, even while forecasts still point to unprofitable earnings in the next three years.

    Look into how the SWS DCF model arrives at its fair value.

    Result: DCF Fair value of CA$131.44 (UNDERVALUED)

    Still, Canfor’s recent CA$653.5m loss and the tougher economics that led to mill closures could keep pressure on sentiment if conditions remain challenging.

    Find out about the key risks to this Canfor narrative.

    Another View On Canfor’s Valuation

    DCF points to a large potential upside for Canfor, but the P/S ratio offers a more grounded perspective. The stock trades at 0.3x sales compared with a 0.7x average for the global forestry group and a 1.6x peer average, while the fair ratio is estimated at 0.8x. That gap suggests some room for re-rating, but it also raises the question of whether the market is pricing in prolonged losses and sector risk more accurately than any model.

    See what the numbers say about this price — find out in our valuation breakdown.

    TSX:CFP P/S Ratio as at Sep 2026
    TSX:CFP P/S Ratio as at Sep 2026

    Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Canfor for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 12 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

    Next Steps

    Good or bad, the Canfor story here is only one read on a complex set of numbers and mill decisions, so move fast and stress test the data against your own expectations. To see what the current optimism is built on, take a closer look at the 3 key rewards.

    Looking for more investment ideas beyond Canfor?

    Do not stop with Canfor. Use the Simply Wall St screener to hunt for fresh ideas that fit your risk tolerance, income needs, and time horizon.

    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.