Reputation Rebuilding At Rayonier Still In Early Phases, Positive Results Expected

In a report published Friday, D.A. Davidson analyst Steven Chercover downgraded the rating on

from Buy to Neutral, but reiterated the $31.50 price target. In the report, D.A. Davidson noted, "Downgrading to NEUTRAL on valuation. It probably feels like an eternity for Rayonier's new CEO David Nunes (and even newer CFO Mark McHugh) since he took over the reins, took stock of his timber inventories, and watched his stock price plummet when the results were revealed. The work of reestablishing Rayonier's reputation and restocking its timberlands is still in its early days – fortunately we believe the team has the energy and the time to complete the task." The report continued, "We upgraded Rayonier shares to Buy on November 20th (ten days after the Big Reveal) when we thought the discount to the revised NAV of $35 was overdone. The shares have subsequently appreciated 10.5%; the current potential rate of return is now only 8% equity upside (to our $31.50 target) plus a 3.4% dividend yield, therefore we are downgrading RYN shares back to NEUTRAL." Rayonier closed on Thursday at $29.17.