The S&P 500's reversal on Monday carved a jagged gash across stock charts in the technology, commodities, retail and energy sectors. Among the third of the index that gained ground for the day, S&P 500 stock Weyerhaeuser topped the list with a 4% gain.
Seattle-based Weyerhaeuser appears set to become a clear beneficiary of the 25% tariffs placed on Canadian products by President Donald Trump. The lumber producer is incorporated as a REIT, a real estate investment trust. It manages 10.4 million acres of timberland in the U.S., owning 9.8 million acres of that land with long-term contracts for the rest. And it holds licenses for 14.1 million acres of timberland in Canada.
Most Weyerhaeuser Lumber In U.S.
Wood products, primarily lumber and oriented strand board, or OSB, made up the bulk of 2024 revenue and profit. Wood products generated earnings of $457 million on revenue of $5.22 billion. Timber management earnings were $280 million on $1.51 billion in revenue.
About 80% of Weyerhaeuser's lumber manufacturing is located in the U.S., CEO Devin Stockfish said during the Q4 investor call on Feb. 27. Only about 20% to 30% of the company's Canadian lumber is imported to the U.S., he noted.
Meanwhile, Trump's new round of tariffs will pile on top of an existing 14.5% U.S. duty for softwood lumber imports from Canada. In addition, the existing duty is expected to "increase meaningfully" this year, according to Stockfish.
"I would expect you'd see prices go up somewhat, at least to the point where Canadians and Canadian manufacturing center product into the U.S. would be margin-positive," he said. "Otherwise you would expect capacity to come out of the system. So, I think it would have some upward pricing pressure.
Trump Timber Order
The March 4 tariffs come after President Trump issued an executive order on March 3 aimed at expanding U.S. timber production. The order assigned a 280-day timeline for various departments to provide updated guidance and targets to increase production.
It also directs the Secretary of the Interior and Secretary of Agriculture to issue new guidance regarding tools for increased timber production, reduced timber delivery time, and decreased supply uncertainty within 30 days.
It tasks the Secretary of the Interior to provide, within 60 days, a strategy to expedite forestry project approvals and permits, as well as delegate consultation requirements to nonexecutive agencies.
The order also calls for reducing administrative approval time for timber production, forest management and wildfire risk treatments. The executive order also requires new categorical exclusions for timber thinning, and reestablishes a categorical exclusion for timber salvage activities.
"I think it creates a real opportunity," Stockfish said during the Raymond James Institutional Investor Conference on Monday, adding the policies need to be crafted in the right way. "But there's a focus on the industry that you really haven't seen in a long time. And I think that's probably a net positive."
Limited Opportunity For Expansion
However, there is a limit to what the order could accomplish. Stockfish said there has been a limit on logging capacity, primarily in the Northwest and Montana and Idaho. There is more availability in the U.S. south due to less federal ownership.
However, timber sales from the U.S. Forest Service could still be challenged under the Endangered Species Act and National Environmental Policy Act. Meanwhile, mills built to process timber harvested from private timberland typically aren't large enough for federal timber logs, Stockfish said.
"There are a variety of reasons where I think, as a practical matter in the near term, it would be hard to meaningfully increase the amount of federal timber coming to market," Stockfish said.
S&P 500 Stock Weyerhaeuser
WY stock eased 1.9% Tuesday, paring some of its 4.3% gain on Monday. The stock is no leader: it has a weak 40 composite rating from IBD and is sitting on at least eight quarters of earnings declines. Despite its REIT designation, its dividend yield remains a modest 2.67%.
But the stock did come out on top during Monday's messy sell-off.
The S&P 500 stock is more than 9% in 2025.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
