Bank of America's George Staphos downgrades Weyerhaeuser's stock rating from Buy to Neutral with a price target lowered from $36 to $35 as many catalysts have played out over the years. The analyst held a Buy rating on the stock as far back as 2014 with a price target as high as $41.
Few Catalyst Ahead
Some of the events include higher lumber pricing, the Plum Creek acquisition and management's "Operational Excellence" initiative to improve its cost position and achieve a cash break-even position in wood products despite a recessionary environment.
But now there are limited catalysts left to boost the stock higher in the intermediate term, the analyst continued. As such, a Neutral rating is more appropriate, especially when factoring in the year-over-year deceleration in lumber and OSB pricing, which implies investors shouldn't expect a positive guidance revision in the near term.
Meanwhile, slowdown in inflation will have a "moderately negative impact" on Weyerhaeuser's stock. Also, encouraging reports from the company's "Asset Value Optimization" program for its Western Timberlands is already factored into the analyst's sum-of-the-parts valuation and $35 price target.
Bottom line, with few catalysts ahead, the likelihood of upside "seem limited" moving forward.
Related Links:Benzinga's Top Upgrades, Downgrades For July 5, 2017
Bernstein Upgrades BHP Billiton On High 'Intrinsic Value,' Change In Leadership ________ Image Credit: By Tony Webster from Washington, DC (Weyerhaeuser Logging) [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.