Weyerhaeuser Company (WY), based in Seattle, Washington, is among the world’s largest private timberland owners. Functioning as a real estate investment trust, it owns or controls about 10.5 million acres of timberlands in the U.S. and manages an additional 14 million acres in Canada under long-term licenses. With a market capitalization of $22.02 billion, Weyerhaeuser is one of North America's leading wood product manufacturers and also engages in various business lines, including real estate, climate solutions, energy, and natural resources.
Shares of the leading forest products company have underperformed the broader market considerably over the past year. WY has gained 5.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 28.9%. In 2024, WY stock is down 13.1%, while the SPX is up 11.2% on a YTD basis.
Narrowing the focus, WY’s underperformance looks less pronounced compared to the Global Timber & Forestry iShares ETF (WOOD). The exchange-traded fund has gained about 18.4% over the past year. The ETF’s 3.6% gains on a YTD basis compare to the stock’s loss over the same time frame.
On Apr. 25, WY reported its Q1 results. The company’s revenue was $1.80 billion, missing the Street estimates of $1.84 billion. The company’s net income stood at $114 million. Also, its EPS came in at $0.16, beating the Street forecasts of $0.15. The stock declined 1.3% in the session following the day the results were released.
For the current fiscal year, ending in December, analysts expect WY to report an EPS decline of 2% to $1 on a diluted basis. The company’s surprise history is impressive. It beat or matched the consensus estimate in each of the last four quarters.
Among the 10 analysts covering WY stock, the consensus rating is a “Moderate Buy.” That’s based on five “Strong Buy” ratings, one “Moderate Buy,” and four “Holds.”
This configuration has been consistent over the past three months.
Recently, RBC Capital reaffirmed its “Outperform” rating on WY stock and reduced its price target from $38 to $37, implying a potential upside of 22.5% from current levels.
The mean price target of $38 represents a 25.8% premium to WY’s current price levels. The Street-high price target of $42 suggests an ambitious upside potential of 39.1%.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
