Weyerhaeuser (WY, Financial) announced a first-quarter revenue of $1.71 billion, falling short of the expected $1.77 billion. Despite the revenue shortfall, the company highlighted solid performance across all its business sectors for the quarter.
The company also announced an increase in its quarterly base dividend, marking the fourth consecutive year of such growth. CEO Devin Stockfish emphasized the organization's robust performance, noting the challenging macroeconomic environment.
Looking ahead, Weyerhaeuser remains optimistic about navigating various market conditions in the near future. The company maintains confidence in the long-term demand fundamentals that support its operations. With a strong balance sheet, Weyerhaeuser aims to continue its focus on operational excellence, strategic opportunities, and creating long-term shareholder value through a disciplined capital allocation strategy.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 10 analysts, the average target price for Weyerhaeuser Co (WY, Financial) is $34.80 with a high estimate of $38.00 and a low estimate of $30.00. The average target implies an upside of 36.47% from the current price of $25.50. More detailed estimate data can be found on the Weyerhaeuser Co (WY) Forecast page.
Based on the consensus recommendation from 13 brokerage firms, Weyerhaeuser Co's (WY, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Weyerhaeuser Co (WY, Financial) in one year is $29.54, suggesting a upside of 15.84% from the current price of $25.5. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Weyerhaeuser Co (WY) Summary page.
WY Key Business Developments
Release Date: January 31, 2025
- Full Year GAAP Earnings: $396 million or $0.54 per diluted share.
- Full Year Net Sales: $7.1 billion.
- Full Year Adjusted EBITDA: $1.3 billion.
- Fourth Quarter GAAP Earnings: $81 million or $0.11 per diluted share.
- Fourth Quarter Net Sales: $1.7 billion.
- Fourth Quarter Adjusted EBITDA: $294 million, a 25% increase over the third quarter.
- Cash Returned to Shareholders in 2024: $735 million, including $153 million of share repurchase.
- Fourth Quarter Cash from Operations: $218 million.
- Year-End Cash Balance: Just under $700 million.
- Gross Debt: $5.1 billion.
- Adjusted Funds Available for Distribution in 2024: $567 million.
- Timberlands Fourth Quarter Earnings Contribution: $62 million.
- Timberlands Fourth Quarter Adjusted EBITDA: $126 million.
- Real Estate, Energy, and Natural Resources Fourth Quarter Earnings Contribution: $46 million.
- Real Estate, Energy, and Natural Resources Fourth Quarter Adjusted EBITDA: $76 million.
- Wood Products Fourth Quarter Earnings Contribution: $106 million.
- Wood Products Fourth Quarter Adjusted EBITDA: $161 million, a 77% increase compared to the third quarter.
- Lumber Fourth Quarter Adjusted EBITDA: $21 million, a $50 million improvement compared to the third quarter.
- OSB Fourth Quarter Adjusted EBITDA: $63 million, a $24 million increase compared to the third quarter.
- Engineered Wood Products Fourth Quarter Adjusted EBITDA: $69 million, an increase of $8 million compared to the third quarter.
- Share Repurchase Activity in Fourth Quarter: $28 million.
- 2025 Total Company Fee Harvest Volumes Expectation: Approximately 35.5 million tons.
- 2025 Full-Year Adjusted EBITDA Expectation for Real Estate, Energy, and Natural Resources: Approximately $350 million.
- 2025 Capital Expenditures Expectation: Approximately $440 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Weyerhaeuser Co (WY, Financial) reported a 25% increase in adjusted EBITDA for the fourth quarter, reaching $294 million.
- The company announced plans to invest approximately $500 million in a new Timberstrand facility in Arkansas, expected to generate over $100 million of annual adjusted EBITDA.
- Weyerhaeuser Co (WY) increased its base dividend by more than 5% and returned $735 million of cash to shareholders in 2024.
- The Natural Climate Solutions business saw a 79% increase in adjusted EBITDA, driven by strong contributions from conservation, mitigation banking, and renewables.
- The company achieved notable milestones in Forest Carbon, with significant increases in credit generation and sales expected in 2025.
Negative Points
- The company faced challenging market conditions in 2024, particularly in the lumber sector, impacting cash generation.
- Multifamily housing starts decreased by approximately 25% in 2024 due to higher interest rates and a wave of new units entering the market.
- Weyerhaeuser Co (WY) experienced lower sales volumes in China due to ongoing consumption headwinds and reduced shipments.
- The company anticipates slightly higher unit manufacturing costs for OSB in the first quarter of 2025 due to increased energy and resin costs.
- There is uncertainty regarding potential tariffs on Canadian wood products, which could impact pricing and margins.
