Raymond James turns bearish on timber REITs on demand, pricing concerns

Rayonier

27/11/2023 19:18

** Raymond James downgrades timber real estate investment
trusts (REITs) Weyerhaeuser  WY.N  and PotlatchDeltic Corp
 PCH.O  to "market weight" from "overweight" 
    ** Brokerage sees conservative Q4 and FY24 outlook for wood
products commodity pricing in lumber and engineered wood, lowers
EPS estimates for cos 
    ** Says market price realizations across lumber indices has
reached new year-to-date lows, despite resilience in
single-family home production market 
    ** Factors like unprofitable production of lumber out of
British Columbia, surge in European lumber and decline in
repairing activity have disrupted traditional demand/supply
models - RJ
    ** Brokerage maintains "market weight" rating on Rayonier
 RYN.N ; sees healthy investor appetite and capital inflows in
the U.S. South timber business
    ** WY has risen 5.3% YTD, PCH has gained 6.7% YTD,
outperforming the S&P 1500 - other Specialized REITs that have
gained 2.2% year-to-date

 (Reporting by Purvi Agarwal in Bengaluru)
 ((Purvi.Agarwal@thomsonreuters.com))