Seattle-based Weyerhaeuser Company (WY) is one of the world's largest owners of timberlands. With a market cap of $20.3 billion, the company has control over approximately 11 million acres of timberlands in the U.S. and manages additional timberlands under long-term licenses in Canada.
Companies worth $10 billion or more are generally described as "large-cap stocks," Weyerhaeuser fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the specialty REITs industry. Its operations are concentrated in Southern California, Nevada, Washington, Texas, Maryland, and Virginia. The company caters to a diverse clientele spread across the U.S., Canada, Japan, Europe and other regions.
Despite its notable strengths, WY stock has tanked nearly 25% from its 52-week high of $36.27 achieved on Mar. 28. Furthermore, the stock has declined approximately 19% over the past three months alone, underperforming the Real Estate Select Sector SPDR Fund’s (XLRE) 10.5% decline during the same time frame.
Weyerhaeuser has underperformed the real estate sector over the longer term as well. WY stock has plunged over 21% in the past 52 weeks, compared to XLRE’s marginal gains during the same time frame.
To confirm the bearish trend, WY stock has traded below its 200-day moving average since mid-April and below its 50-day moving average since late October with some fluctuations.
Weyerhaeuser’s stock prices dipped over 1% in the trading session after the release of its disappointing Q3 results on Oct. 24. The company has observed a decline in sales and earnings across all its various segments due to a drop in volumes as well as pricing. Its net sales declined nearly 16.9% compared to the year-ago quarter to $1.7 billion, falling short of Wall Street’s expectations. Meanwhile, its adjusted EPS tanked over 84.8% compared to the year-ago quarter to $0.05.
Weyerhaeuser’s peer Rayonier Inc. (RYN) has also observed a similar downturn in stock prices. RYN has declined 21.5% over the year, marginally underperforming WY.
Nevertheless, analysts remain optimistic about the stock’s long-term prospects. Among the 11 analysts covering the WY stock, the consensus rating is a “Moderate Buy.” Its mean price target of $36.89 suggests a 35.6% upside potential from current price levels.
