West Fraser Timber Co. Ltd. (WFG) increase its earnings estimates?

Ois Fraser Timber Co. Ltd. (WFG) could be a solid choice for investors given the company’s remarkably improved earnings outlook. Although the stock has been a strong performer of late, this trend may continue as analysts continue to raise their earnings estimates for the company.

The upward trend in estimate revisions for this company reflects growing analyst optimism about its earnings outlook, which should be reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and short-term stock price movements. Our stock rating tool – the Zacks Ranking – is based on this idea.

The five-tier Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally audited track record of outperformance, with stocks ranked Zacks #1 generating an average annual return of +25% since 2008.

For West Fraser Timber Co. Ltd. A strong agreement among analysts covering the upward revision of earnings estimates resulted in a significant improvement in consensus estimates for the next quarter and the full year.

The chart below shows the evolution of the Zacks Consensus forward EPS estimate over 12 months:

12 month EPS

Revisions to current quarter estimates

The earnings estimate of $7.84 per share for the current quarter represents a change of +12.64% compared to the figure published a year ago.

The Zacks consensus estimate for West Fraser Timber Co. Ltd. rose 41.26% in the past 30 days, an estimate rising from no negative reviews.

Revisions to estimates for the current year

For the full year, the earnings estimate of $17.94 per share represents a -33.63% change from the prior year.

The revisions trend for the current year also looks quite promising for West Fraser Timber Co. Ltd., with one estimate rising over the past month from no negative revisions. The consensus estimate also received a boost during this period, increasing by 14.78%.

Favorable ranking of Zacks

Promising estimate revisions helped West Fraser Timber Co. Ltd. to earn a Zacks rank #2 (purchase). The Zacks Ranking is a proven scoring tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Conclusion

The shares of West Fraser Timber Co. Ltd. rose 8.9% over the past four weeks, suggesting investors are betting on its impressive estimate revisions. You may therefore consider adding it to your portfolio immediately to take advantage of its earnings growth prospects.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.