Interfor downgraded to Neutral from Outperformer at CIBC

CIBC analyst Hamir Patel downgraded Interfor to Neutral from Outperformer with a price target of C$18, down from C$22. In a sector note on Forestry stocks ahead of Q2 earnings season, CIBC cut Interfor to Neutral, saying the company is “facing further large losses” in the southern region, where nearly half its lumber capacity comes from, which will “weigh on the balance sheet in coming quarters.” The firm believes that while Interfor can likely avoid needing to issue equity by reducing capital expenditures and/or working capital, capturing tax refunds and tenure proceeds, “the need for a sub-optimal monetization of a mill or portion of the company’s duties may also become necessary depending how long the pricing slump lasts.”