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Investing.com - JPMorgan has lowered its price target on Weyerhaeuser (NYSE:WY) to $30.00 from $32.00 while maintaining an Overweight rating on the stock. The timber REIT, currently trading at $25.69 with a market capitalization of $18.63 billion, appears overvalued according to InvestingPro analysis.
The adjustment follows Weyerhaeuser’s June update, which revealed weaker-than-expected lumber and oriented strand board (OSB) sales realizations for the quarter to date. Despite current challenges, the company maintains strong financial health with a FAIR rating from InvestingPro and has sustained dividend payments for 55 consecutive years.
JPMorgan analyst Hong Zhang noted that lumber sales realizations were down $5 per thousand board feet (MBF) quarter-to-date as of June 20, a significant decline from the positive $10 per MBF reported as of May 23.
Similarly, OSB sales realizations deteriorated to negative $35 per MBF quarter-to-date as of June 20, compared to negative $20 per MBF quarter-to-date as of May 23.
As a result of these weaker sales figures, JPMorgan has revised its earnings per share estimates for Weyerhaeuser downward, with 2025 EPS now projected at $0.35 (down from $0.63) and 2026 EPS at $0.62 (down from $0.96). The broader analyst consensus remains positive, with price targets ranging from $30 to $38, suggesting potential upside despite current market headwinds.
In other recent news, Weyerhaeuser Company announced a $375 million acquisition of approximately 117,000 acres of timberland in North Carolina and Virginia from Roanoke Timberlands LLC. This acquisition is expected to enhance Weyerhaeuser’s Southern Timberlands portfolio and improve cash flow. In addition, Weyerhaeuser has agreed to sell its Princeton, British Columbia sawmill for approximately $86 million USD. This sale is part of the company’s strategy to optimize its operations and asset base, given the mill’s operational challenges. Despite the sale price being below recent market rates, DA Davidson analysts maintain a Buy rating on Weyerhaeuser stock with a $36 target.
Meanwhile, Citi analysts have lowered the price target for Weyerhaeuser stock from $35 to $31, citing a challenging demand environment for wood products. However, they continue to recommend the stock with a Buy rating. Argus analysts have maintained a Hold rating on Weyerhaeuser, noting economic headwinds and a slowdown in the housing market. In related news, Citi analysts have reiterated a Buy rating on Potlatch stock with a price target of $47. This comes amid expectations of increased import duties on Canadian lumber, which could impact lumber prices positively. These developments highlight the current strategic moves and market conditions affecting both Weyerhaeuser and Potlatch.
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