Timber REIT Rayonier: Stability And Earnings Growth Despite Sluggish US Housing Market

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• Truist Securities analyst Michael Roxland initiated coverage on Rayonier Inc RYN at Hold with a price target of $33.
• As RYN is a pure-play timber REIT, the analyst sees the absence of ancillary businesses, such as volatile wood products, as a competitive advantage for the company.
• Roxland believes RYN's focus on timberland, a stable and cash-generative business, should offer earnings growth.
• The analyst is also bullish on the increasing presence in the U.S. South markets, driving higher EBITDDA.
• However, the analyst expects continued sluggishness U.S. housing market in the near term on higher financing costs and lower affordability, leading to lower demand for wood products and timber as a matter of concern.
• Roxland projects 2024 revenues and EPS of $931 million and $0.50 (versus the consensus of $0.64), respectively.
• Price Action: RYN shares are trading lower by 2.2% at $29.25 on the last check Tuesday.