Bank of America downgrades Weyerhaeuser shares to Neutral on weak housing outlook

Trending News 🌧️

Weyerhaeuser($NYSE:WY) is one of the biggest decliners on the S&P 500 today, down 6%, after Bank of America downgraded the stock to Neutral from Buy with a $34 price target. The bank cited a weaker outlook for the housing market and Weyerhaeuser’s exposure to oriented strand board products as reasons for the downgrade. BofA foresees a difficult 2023 ahead for the wood products sector, with operating rates pushing to 80% or lower for both panels and lumber.

This will lead to more pricing pressure on the sector’s products, particularly for OSB. With a recession looming, the bank believes it will be difficult for Weyerhaeuser shares to outperform as Street estimates decline alongside operating rates and prices.

Price History

Weyerhaeuser stock opened at $30.8 and closed at $29.8, a 6.0% drop from its previous closing price of $31.7.

VI Analysis

Weyerhaeuser Company is a real estate investment trust that owns, develops, and manages timberlands in the United States. The company’s fundamentals reflect its long-term potential, and the company is classified as a “cow” by the VI app. This means that it is a dividend-paying company with a track record of paying out consistent and sustainable dividends. Dividend-paying companies are deemed to be less risky, as they pursue growth at a sustainable rate. Weyerhaeuser Company has a high health score of 10/10, considering its cash flows and debt. This means that the company is capable of safely riding out any crisis without the risk of bankruptcy. Weyerhaeuser Company is strong in asset, dividend, and growth.

However, it is only medium in profitability.

Summary

The stock price moved down on the news. Weyerhaeuser is a large forest products company with operations in the United States and Canada. The company is one of the world’s largest producers of wood products. The company’s shares have been under pressure in recent months due to concerns about the housing market.