Bear of the Day: UFP Industries, Inc. (UFPI)

UFP Industries, Inc. UFPI is one of the biggest converters of softwood lumber and a top pressure-treater. The stock tanked 30% in the past year as its earnings outlook faded while it struggles against major industry headwinds.

UFP Industries lands a Zacks Rank #5 (Strong Sell) on the back of its tanking earnings revisions.

Why Investors Should Consider Staying Away from UFPI Stock

The Grand Rapids, Michigan-based company designs, manufactures, and sells wood-based products like treated lumber, decking, fencing, and packaging materials. UFP Industries works with customers across construction, retail, industrials, and beyond.

It operates through three main segments: Retail (e.g., outdoor decking and more), Packaging (e.g., custom pallets and beyond), and Construction (e.g., roof trusses, concrete forms, and more), serving big customers in North America's softwood market.

UFP Industries boasts that it is “North America’s largest converter of softwood lumber, and the world’s largest pressure-treater.”

UFP Industries went on a massive run between 2010 and 2022, capped off by a post-Covid boom, boosted by the housing, home improvement, and construction spending spree.

Some of its core markets have changed dramatically since then as mortgage rates soared off their lows. Housing prices and inflation have skyrocketed as well, hitting the housing and construction markets hard.

On top of that, commodity prices are hurting UFP Industries and the broader industry. It is also worth stressing just how much the Covid-era pull forward shocked the Building Products–Wood industry and many other areas tied to housing and construction.

UFPI’s revenue tanked 25% in 2023 and 8% in 2024, while its GAAP earnings fell 27% and 16%, respectively.

The firm missed our Q3 FY25 earnings per share estimate by 6% in late October, marking its fifth straight miss. The firm also provided another round of downbeat guidance, with its FY26 EPS estimate 10% lower.

UFP Industries is projected to see its revenue fall another 4% in 2025 and its adjusted EPS tank 23%. Plus, its negative earnings revisions earn UFPI a Zacks Rank #5 (Strong Sell) and extend its massive downward EPS trend that began in late 2022.

The company’s longer-term outlook likely remains on track since the housing and construction markets are bound to rebound at some point. Plus, UFP Industries pays a dividend and buys back its stock to help return value to shareholders amid its current struggles.

That said, investors likely want to stay away from UFPI stock for now and wait until there are more signs of a turnaround across its various end markets. 

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This article originally published on Zacks Investment Research (zacks.com).

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