Forest Products Q2 Preview: Lumber Margins Come Back to Life

Research evidence excerpt

Forest Products Q2 Preview: Lumber Margins Come Back to Life

Global Research

July 14, 2026

Forest Products Q2 Preview: Lumber Margins Come Back to■Paper & Forest Products

■Special Situations Life

Sean Steuart, CFA^ THE TD COWEN INSIGHT

416 308 3399

We expect improved Q2/26 results on both q/q and y/y bases for most equities across our coverage set. Input and freight

sean.steuart@tdsecurities.com

cost inflation was pronounced in Q2, but rising softwood lumber and containerboard prices are expected to provide an

Kasia Trzaski Kopytek, CFA, CPA, CA^ offset. We are increasing 2026 and 2027 earnings estimates for most names to reflect higher commodity price and lower

416 983 4058 CAD forecasts. WFG is our revised top pick.

kasia.trzaski@tdsecurities.com

This report outlines expectations for the Q2/26 earnings season and updates our outlook through 2027 for the forest

Price Target Changes

product and packaging sector.

ADEN-T C$43.00 (Prior C$42.00)

■Key Q2/26 themes: 1) Positive q/q earnings momentum for lumber producers and likely upward revisions to near-term

CAS-T C$15.00 (Prior C$13.00)

consensus estimates. The Q2/26 average USD-denominated composite lumber price increased 13% q/q to its highestCFP-T C$18.00 (Prior C$16.00)

DBM-T C$13.00 (Prior C$12.00) level since Q3/22, led by positive momentum for utility grades and wider dimensions in the U.S. South. 2) Manageable

IFP-T C$14.00 (Prior C$10.00) cost inflation. In most cases, we believe that the margin impact will be muted. 3) Continued focus on balance sheet

KPT-T C$14.00 (Prior C$12.00) preservation.

LPX $90.00 (Prior $86.00)

MERC $0.40 (Prior $0.50) ■Commodity deck, cost, and volume outlook. Adjustments to 2026-27 forecasts: 1) Higher lumber prices, with average