Gold prices slip slightly after recent gains; U.S. data eyed
On Monday, Citi analysts adjusted their outlook on Potlatch stock (NASDAQ:PCH), reducing the price target to $47 from the previous $49, while maintaining a Buy rating. Currently trading at $39.34, the stock sits between analyst targets ranging from $42 to $55, with a consensus Buy recommendation. According to InvestingPro data, the company’s management has been actively buying back shares, showing confidence in the business. The decision reflects the company’s current trading position and future potential in the timber and wood products sector.
Citi analysts noted that Potlatch’s high-quality portfolio of Idaho and Southern Timberlands is currently trading at a 15-20% discount to its net asset value (NAV). They anticipate that lumber prices, which have recently reached a low point, will see a recovery in 2025. The company has maintained dividend payments for 55 consecutive years, currently offering a 4.6% yield. Potlatch is expected to benefit significantly as the timber real estate investment trust (REIT) most leveraged to lumber. InvestingPro subscribers have access to 8 more exclusive insights about PCH’s valuation and growth prospects.
The company is actively improving its portfolio, engaging in high-quality acquisitions in Southern Timberlands, and selling lower-quality land. Additionally, Potlatch is expanding its Wood Products segment, with the modernization and expansion of the Waldo facility aiming to make it one of North America’s top 10 mills.
Potlatch is also set to generate its first U.S. carbon credits this year, with a strong pipeline of solar lease agreements already in place. These strategic moves are part of the company’s broader effort to enhance its asset base and capitalize on emerging opportunities in the renewable energy sector.
In other recent news, PotlatchDeltic Corp reported a strong financial performance for the first quarter of 2025, surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $0.33, significantly exceeding the forecasted $0.17, marking a 94% surprise. Revenue also outperformed projections, reaching $268.3 million compared to the anticipated $243.1 million. PotlatchDeltic’s total adjusted EBITDA rose to $63 million, up from $53 million in the previous quarter, reflecting robust performance across its business segments. The Timberlands segment reported an increase in EBITDA from $34 million to $42 million, while the Wood Products segment saw an increase from $9 million to $12 million. The company’s Waldo, Arkansas sawmill achieved operational milestones, reducing processing costs by 30%. PotlatchDeltic continues to explore natural climate solutions, including solar and lithium projects, which could offer future growth opportunities. Despite these positive developments, the company’s stock experienced a slight decline in after-hours trading.
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