Valued at a market cap of $20.4 billion, Weyerhaeuser Company (WY) is one of the largest private owners of timberlands globally, with approximately 11 million acres in the U.S. and additional lands managed in Canada. The Seattle, Washington-based company operates sustainably across timber, real estate, and manufacturing, offering products like lumber, plywood, and hardwood, as well as minerals, oil, and gas. WY is set to release its fiscal Q4 earnings results after the market closes on Thursday, Jan. 30.
For Q4 earnings results, analysts forecast the timber and paper products company to post a profit of $0.07 per share, a decline of 56.3% from $0.16 per share in the same quarter last year. The company has surpassed Wall Street's bottom-line estimates in three of the past four quarters while missing on another occasion. In Q3, WY exceeded the consensus EPS estimate by a significant 150% margin.
For fiscal 2024, analysts expect WY to report EPS of $0.49, a decrease of nearly 52% from $1.02 in fiscal 2023. However, for fiscal 2025, analysts anticipate a significant rebound, with EPS projected to grow 69.4% year-over-year to $0.83.
Over the past 52 weeks, WY has dropped 19.1%, underperforming the broader S&P 500 Index's ($SPX) 23.4% rise and the Real Estate Select Sector SPDR Fund's (XLRE) marginal rise over the same period.
Despite reporting stronger-than-expected Q3 adjusted earnings of $0.05 per share on Oct. 24, shares of WY fell over 1% the next day due to a miss on net sales, which came in at $1.7 billion. The year-over-year declines in both earnings and sales highlighted challenges from lower fee harvest volumes in the West, reduced domestic sales volume, and increased lumber manufacturing and raw material costs. The company’s adjusted EBITDA fell 53.6% year-over-year to $236 million, further raising concerns about profitability.
Additionally, weaker Q4 guidance for the Timberlands and Real Estate, Energy, and Natural Resources segments, with expectations of flat Timberlands performance and a $10 million decline in Real Estate EBITDA, coupled with modestly lower log sales realizations in the West and higher costs in the South, amplified investor caution.
Analysts' consensus rating on Weyerhaeuser stock is moderately optimistic with a "Moderate Buy" rating overall. Out of 11 analysts covering the stock, opinions include six "Strong Buys," two "Moderate Buys," and three "Holds." This configuration is slightly more bullish than three months ago, with five "Strong Buy" ratings. As of writing, WY is trading below the average analyst price target of $36.10.
