Headquartered in Seattle, Washington, Weyerhaeuser Company (WY) is a leading timberland and forest products company with a market cap of $23.2 billion. Weyerhaeuser sustainably manages millions of acres of timberlands across North America and supplies wood products for residential, commercial, and industrial markets worldwide.
Shares of Weyerhaeuser have significantly underperformed the broader market over the past year. The stock has gained 5.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 36.8%. In 2024, the stock is down 8.3%, compared to the SPX’s 25.7% rise on a YTD basis.
Narrowing the focus, WY’s underperformance looks more pronounced when measured against the iShares Global Timber & Forestry ETF (WOOD). The exchange-traded fund has gained 9.5% over the past 52 weeks. Moreover, the stock's YTD loss is wider than the exchange-traded fund's marginal decline over the same time frame.
Weyerhaeuser has underperformed the broader market over the past year due to challenges in the global lumber market and increased competition from other timber companies.
On Oct. 24, Weyerhaeuser reported its Q3 earnings results, and the stock dipped over 1% in the subsequent trading session. The company’s revenue of $1.68 billion missed the Street’s estimates of $1.73 billion. However, its EPS came in at $0.05, surpassing the Street forecasts of $0.02.
For the current fiscal year, ending in December, analysts expect WY’s EPS to decline 54.9% to $0.46 on a diluted basis. The company's earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing on another occasion.
Among the 11 analysts covering WY, the consensus rating is a “Moderate Buy.” That’s based on five “Strong Buy” ratings, one “Moderate Buy,” and five “Holds.”
This configuration has been almost consistent over the past month.
On Oct. 29, Seaport Global analyst Mark Weintraub reiterated a ‘Buy’ rating on Weyerhaeuser with a price target of $38, implying a potential upside of 19.2% from current levels.
The mean price target of $36.67 represents a premium of 15% to WY’s current price. The Street-high price target of $39 suggests an upside potential of 22.3%.
On the date of publication, Rashmi Kumari 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.
