Q: Thoughts on Interfor Q2 results and is it more of a buy now or wait and see?
5i Research Answer:
IFP, is now trading at 12.7x times' EV/EBITDA, and trading at a significant discount to book value, Price/Book is around 0.6x. In the 2Q, IFP’s revenue declined 37% to $872M, beating estimates of $818M and EPS was -$0.35 missing estimates of -$0.32. The balance sheet is quite leveraged, with net debt of $643M, and net debt/EBITDA is around 5.6x (as EBITDA is at its trough. Lumber in general experienced a cyclical downturn recently, coming off big years of COVID. We think the cyclical downturn could be a good time to average into the sector, but we prefer other names such as WFG, ADN.