Positive. RBC predicts cyclical recovery in containerboard and benefits for North American producers in 2025
From Investing.com: 2024-12-28 04:00:00
RBC Capital Markets predicts a cyclical recovery in containerboard and tighter lumber supply to benefit North American producers in 2025 despite challenges from high interest rates and subdued housing demand. International Paper and Smurfit WestRock are top picks in containerboard, while Interfor, Canfor, and West Fraser are favored in lumber.
30-year mortgage rates at 6.72% may limit wood product demand, with RBC forecasting a modest 3% increase in single-family housing starts. Permanent capacity reductions in North American lumber are expected to tighten the market, driving Random Lengths Composite pricing to $460 per thousand board feet.
Anticipated $20 per ton increases for linerboard and medium in January indicate pricing momentum. International Paper and Smurfit WestRock focusing on value over volume could support margin expansion. Tariffs and trade policies discussions could impact market dynamics, with RBC highlighting small-cap names like Clearwater Paper and Rayonier Advanced Materials as worth watching.
RBC raised price targets for CAS and SW while trimming forecasts for several lumber names. Q4 2024 EBITDA estimates are ahead of consensus for seven stocks, including Interfor, West Fraser, and Weyerhaeuser. Market dynamics could be affected by ongoing discussions around tariffs and trade policies.
Read more at Investing.com: Paper & forest products 2025 outlook and top stocks to own By Investing.com