BMO sees an attractive entry point in this lumber stock

Investing.com -- BMO Capital Markets upgraded one lumber stock to Outperform in a note on Wednesday, saying the stock offers a compelling opportunity for long-term investors despite near-term housing market uncertainty.

The stock in question is Boise Cascade (NYSE: BCC).

“While housing demand is likely to be choppy in the near term, we think the current stock price offers a very attractive entry point for patient long-term investors,” analyst Ketan Mamtora wrote.

BMO maintained its $100 price target on the shares, which closed at $70.41 on Tuesday, November 4, implying a total return potential of 43%.

Mamtora noted that Boise Cascade’s balance sheet is robust, with net cash of about $66.8 million as of September 30, and that the company is trading at “just 4.0x our mid-cycle EBITDA estimate.”

The firm estimates Boise Cascade’s mid-cycle value at $111 per share, based on 6.5 times its updated mid-cycle EBITDA estimate of $598 million. “Given near-term uncertainty, we are using a 10% discount to get to our $100 price target,” BMO said.

BMO highlighted signs of stabilization in engineered wood products (EWP) pricing, stating that “EWP prices have been stable since August with potential for improvement in 2026 — encouraging.”

The analyst expects fourth-quarter adjusted EBITDA of $45.8 million, with $4.3 million from the Wood Products segment and $51.2 million from Building Materials Distribution.

Boise Cascade also increased its share repurchase authorization by $300 million after buying back $120 million worth of stock this year.

BMO concluded that “management is rational,” and that the company’s disciplined approach, improving pricing environment, and strong balance sheet supports its view of an attractive entry point for patient investors.

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