On Friday, TD Securities adjusted its stance on Interfor Corp (IFP:CN) (OTC: IFSPF) stock, moving the rating from Buy to Hold, while increasing the price target to C$23.00 from C$21.00. This change reflects a cautious outlook despite an anticipated gradual earnings improvement for the company starting in 2025.
The North American lumber market is showing signs of a cyclical recovery, which TD Securities expects will bolster Interfor's earnings over the coming years. The firm anticipates that the lumber producer will see a positive turn in its financial performance, with the worst of the earnings cycle now likely in the past for Interfor.
The decision to downgrade the stock to a Hold rating comes after a period of notable share price strength and valuation expansion for Interfor. TD Securities suggests that the recent performance of the company's stock has been robust, prompting a reassessment of its investment rating.
The firm also noted that Interfor represents a higher-risk investment compared to its industry peers. This assessment has contributed to the revised rating, signaling a more conservative investment approach towards the company despite the positive market recovery trend.
The new price target of C$23.00, up from the previous C$21.00, indicates a modest increase in the expected value of Interfor's shares. This adjustment aligns with the broader context of a recovering lumber market and the anticipation of earnings improvement for the company in the near future.
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