In a research note released Monday, D.A. Davidson analyst Steven Chercover adjusted his estimates on Rayonier RYN and downgraded the stock from Buy to Neutral.
The adjustment was due to the valuation of the company, as the parent company spun off Rayonier Advanced Materials, which will begin trading on the NYSE under the symbol RYAM. The analyst has excluded RYAM for its estimates.
As details of the spin of have become clearer, RYAM will pay Rayonier a dividend payment of $950 million, which the analyst expects Rayonier will use to pay off some of its debt. The analyst said Rayonier currently has a “brawny balance sheet.”
Furthermore, Rayonier will pay an annual dividend, with an additional $0.50 in special dividend for Q3 2014.
The analyst now expects 2014 EPS of $1.31 and 2015 EPS of $1.10.
Shares of the company are down 27 percent.
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