Last Update 23 Dec 25

BCC: Future Returns Will Be Driven By Mid Cycle EBITDA Upside Potential

Analysts have nudged their price target on Boise Cascade slightly higher to $100, citing a very attractive entry point at just 4.0 times estimated mid cycle EBITDA, a robust balance sheet, and encouraging stabilization in wood prices.

Analyst Commentary

Bullish analysts highlight that the stock’s valuation at roughly 4.0 times estimated mid cycle EBITDA materially discounts Boise Cascade’s normalized earnings power, creating a potentially appealing setup for multiple expansion as conditions improve.

They also point to the company’s robust balance sheet, which provides financial flexibility to navigate cyclical swings, fund capital projects, and potentially return capital to shareholders without overextending leverage.

Stabilization in wood prices is viewed as an early sign that margin pressure may be easing. This may support more predictable cash flows and could improve visibility for long term growth planning.

Overall, the combination of discounted valuation, solid financial footing, and an improving pricing backdrop underpins the argument that current levels may offer an attractive entry point for patient long term investors who are willing to look through near term volatility.

Bullish analysts see the current multiple as low relative to mid cycle earnings. This is viewed as implying room for both earnings recovery and valuation re rating.
Strong liquidity and low leverage are expected to support continued investment in core operations and potential strategic opportunities, including selective capacity additions.
Stabilizing wood prices are seen as reducing downside risk to margins and lending credibility to forward EBITDA estimates that the market may be undervaluing.
For long horizon investors, the risk reward profile is viewed as favorable, with cyclical recovery and operational execution seen as offering upside optionality from today’s base.

What's in the News

CEO Nate Jorgensen plans to retire effective March 2, 2026. Current COO Jeff Strom has been unanimously appointed by the board to succeed him on March 3, 2026, while Jorgensen will remain on the board of directors (Key Developments).
The board of directors has authorized a new share repurchase program, allowing Boise Cascade to buy back up to $300 million of its shares with no expiration time. This signals continued confidence in the company’s long term outlook and capital return strategy (Key Developments).
Recent buyback activity includes the repurchase of 120,000 shares for $9 million in October 2025 and 291,400 shares for $24.96 million from July through September 2025. This brings total repurchases under the 2015 authorization to more than 4.3 million shares, or over 11% of shares outstanding (Key Developments).
Boise Cascade has expanded its distribution agreement with James Hardie Building Products, adding AZEK Exteriors and TimberTech Decking and Railing to its offering in the Pittsburgh, Baltimore, and Washington, D.C. markets, leveraging its network of 39 distribution locations across North America (Key Developments).

Valuation Changes

Fair Value Estimate is unchanged at approximately $90.33 per share, indicating no revision to the long term intrinsic value assessment.
The Discount Rate edged down slightly from about 8.33% to 8.32%, reflecting a marginally lower required return on equity.
Revenue Growth is effectively unchanged, moving fractionally from roughly 2.59% to 2.59% on an annualized basis.
The Net Profit Margin ticked up very slightly from about 3.16% to 3.16%, signaling a negligible improvement in long run profitability assumptions.
Future P/E eased modestly from around 17.57x to 17.56x forward earnings, suggesting a minimal change in valuation multiple expectations.

Modernized production and an expanded distribution network are improving efficiency, asset utilization, and Boise Cascade's ability to meet rising housing and remodeling demand.
Secular trends in sustainability and demographic-driven housing needs are supporting consistent revenue and margin growth, aided by disciplined capital allocation.
Diminished pricing power, soft construction demand, and high capital needs expose Boise Cascade to prolonged profit pressures, margin instability, and uncertain cash generation.

Catalysts

About Boise Cascade

Engages in manufacture and sale of engineered wood products (EWP) and plywood, and wholesale distribution of building materials in the United States and Canada.What are the underlying business or industry changes driving this perspective?

Ongoing investments in production modernization (e.g., completion of Oakdale mill and upcoming Thorsby line) are expected to enhance operational efficiency and output flexibility, supporting higher margins and earnings through lower operating costs and improved asset utilization.
The company's national expansion and optimization of its distribution network-including new and expanded distribution centers-are strengthening its ability to capture incremental demand from a growing U.S. housing stock and remodeling activity, potentially boosting long-term revenue and EBITDA margins.
Structural factors such as continued U.S. household formation, demographic tailwinds, and aging housing stock underpin a long runway of demand for Boise Cascade's engineered wood and building products, supporting sustained volume growth and top-line revenue expansion.
Robust capital allocation, highlighted by regular dividends and a significant share repurchase program, reflects disciplined management and provides a pathway to higher EPS growth on top of consistent free cash flow generation.
Increased adoption of sustainable construction methods and the value proposition of engineered wood products position Boise Cascade to benefit from secular trends in green building, widening its customer base and supporting both revenue growth and margin resilience.

Boise Cascade Earnings and Revenue Growth

Boise Cascade Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Boise Cascade's revenue will grow by 2.4% annually over the next 3 years.
Analysts assume that profit margins will increase from 4.0% today to 4.1% in 3 years time.
Analysts expect earnings to reach $285.8 million (and earnings per share of $8.54) by about September 2028, up from $262.3 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $347.3 million in earnings, and the most bearish expecting $249.0 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 15.7x on those 2028 earnings, up from 12.1x today. This future PE is lower than the current PE for the US Trade Distributors industry at 22.0x.
Analysts expect the number of shares outstanding to decline by 2.78% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.28%, as per the Simply Wall St company report.

Boise Cascade Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Declining revenue and net income year-over-year-second quarter 2025 sales were down 3%, net income nearly halved from the prior year, and Wood Products segment EBITDA declined sharply due to lower pricing and volumes, indicating ongoing and potentially prolonged earning pressures.
Persistent competitive pricing pressure and stagnant demand for engineered wood products and I-joists, coupled with sequential price declines (LVL and I-joist prices fell 3% and 2% respectively), suggest structurally limited pricing power that could negatively impact future gross margins and overall earnings.
High operational leverage and sizable ongoing capital expenditures ($220–$240 million for 2025, including multi-year projects) expose Boise Cascade to risk if end-market demand fails to rebound, threatening returns on invested capital and compressing free cash flow.
Management highlighted near-term and possibly extended headwinds for residential construction-affordability challenges, elevated existing home inventory, and consumer uncertainty-which may lead to continued volume declines and revenue volatility well into 2026.
Exposure to commodity price fluctuations (for lumber, plywood, and OSB) and potential trade policy/tariff volatility, as noted in management's forward-looking statements, introduce ongoing risks to net margins and earnings stability due to unpredictable input and product pricing.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $103.667 for Boise Cascade based on their expectations of its future earnings growth, profit margins and other risk factors.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $7.0 billion, earnings will come to $285.8 million, and it would be trading on a PE ratio of 15.7x, assuming you use a discount rate of 8.3%.
Given the current share price of $85.29, the analyst price target of $103.67 is 17.7% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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