Weyerhaeuser Company Struggles Despite Strong Growth Forecasts
Valued at a market cap of $22 billion, Seattle, Washington-based Weyerhaeuser Company (WY) stands as one of the world’s largest private timberland owners, overseeing approximately 11 million acres in the U.S. along with additional lands in Canada. The company operates as a real estate investment trust (REIT), focusing on sustainable forest management and is a leading manufacturer of wood products across North America.
Mixed Performance in the Market
Over the past 52 weeks, shares of Weyerhaeuser have lagged behind the broader market. WY has declined 7.7% during this period, contrasting sharply with a 22.7% increase in the S&P 500 Index ($SPX). Interestingly, on a year-to-date (YTD) basis, WY has rallied 7.6%, significantly outperforming SPX’s 3.3% gain.
Comparison with Real Estate Sector
WY’s struggles are further underscored when measured against the Real Estate Select Sector SPDR Fund’s (XLRE) 10.3% gain over the same timeframe.
Quarterly Performance and Investor Concerns
Weyerhaeuser reported better-than-expected Q4 2024 adjusted EPS of $0.11 on January 30, but shares of WY fell 1.1% the following day. This decline arose from net sales of $1.7 billion, which fell short of expectations, marking a 3.7% year-over-year decrease. Concerns arose over declining earnings and sales attributed to lower fee harvest volumes in the West and a pivot from export to domestic markets. Additionally, adjusted EBITDA dropped 8.4% to $294 million.
Optimistic Future Earnings Projections
Looking ahead to the current fiscal year ending December 2025, analysts predict WY’s EPS to grow 50.9% year-over-year to $0.80. The company has had a mixed earnings surprise history, beating consensus estimates in three of the past four quarters while missing in one.
Analyst Ratings Reflect Positive Outlook
Among 11 analysts covering Weyerhaeuser, the consensus rating leans toward a “Strong Buy.” This assessment includes seven “Strong Buy” ratings, two “Moderate Buys,” and two “Holds.” Compared to three months ago, this outlook has improved from five “Strong Buy” ratings.
Price Target Adjustments
On February 5, Raymond James analyst Buck Horne increased the price target for Weyerhaeuser to $35, maintaining an “Outperform” rating. As of now, WY trades below the mean price target of $35.70. The highest target of $39 suggests a potential upside of 28.9% from its current price.
On the date of publication, Sohini Mondal 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.
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