PotlatchDeltic Corporation (PCH, Financial) reported first-quarter revenue of $268.3 million, significantly exceeding the anticipated $244.8 million. This performance underscores the company's robust operations across various divisions, even amidst prevailing economic uncertainties. Eric Cremers, PotlatchDeltic's President and CEO, highlighted the successful completion of a pivotal modernization and expansion project at the Waldo, Arkansas sawmill, which concluded three months earlier than planned. This improvement enhances the mill's competitive edge in the market.
While acknowledging the unpredictable nature of the broader economic landscape, Cremers emphasized that the company is well-positioned for future opportunities. This confidence is backed by a strong financial position, disciplined operations, and a strategic approach to capital allocation. These factors collectively support the company's goal of delivering long-term value to its shareholders.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 8 analysts, the average target price for PotlatchDeltic Corp (PCH, Financial) is $50.38 with a high estimate of $55.00 and a low estimate of $44.00. The average target implies an upside of 27.73% from the current price of $39.44. More detailed estimate data can be found on the PotlatchDeltic Corp (PCH) Forecast page.
Based on the consensus recommendation from 8 brokerage firms, PotlatchDeltic Corp's (PCH, Financial) average brokerage recommendation is currently 1.9, 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 PotlatchDeltic Corp (PCH, Financial) in one year is $43.61, suggesting a upside of 10.57% from the current price of $39.44. 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 PotlatchDeltic Corp (PCH) Summary page.
PCH Key Business Developments
Release Date: January 28, 2025
- Total Adjusted EBITDA (2024): $232 million.
- Timberlands Adjusted EBITDA (2024): $139 million.
- Wood Products Adjusted EBITDA (2024): Loss of $8 million; $9 million in Q4.
- Real Estate Adjusted EBITDA (2024): $147 million.
- Fourth Quarter Adjusted EBITDA: $53 million.
- Timberlands Harvest Volume (2024): 7.6 million tons.
- Lumber Shipments (2024): Over 1.1 billion board feet.
- Real Estate Sales (2024): Sold over 57,000 acres at $2,300 per acre.
- Residential Lots Sold (2024): 135 lots at $146,000 per lot.
- Cash Dividends Paid (2024): $142 million.
- Share Repurchases (2024): $35 million, averaging $41 per share.
- Fourth Quarter Lumber Price Realization: $445 per thousand board feet.
- Fourth Quarter Lumber Shipments: 283 million board feet.
- Fourth Quarter Real Estate Sales: 5,900 acres at $2,900 per acre.
- Liquidity at Year-End: $451 million.
- Capital Expenditures (Q4 2024): $20 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- PotlatchDeltic Corp (PCH, Financial) reported a total adjusted EBITDA of $232 million for 2024, reflecting strong performance in its real estate business and stability in timberlands operations.
- The company achieved a record annual shipment volume of over 1.1 billion board feet of logs, despite downtime for sawmill modernization.
- The Waldo sawmill modernization and expansion project is on track, expected to increase annual capacity by 85 million board feet and generate $25 million in incremental EBITDA annually.
- The real estate segment contributed $147 million in adjusted EBITDA, with strong demand for rural properties and successful sales in the Chenal Valley community.
- PotlatchDeltic Corp (PCH) made significant progress in its Natural Climate Solutions initiatives, doubling solar options under contract with an estimated net present value exceeding $400 million.
Negative Points
- The wood products segment faced challenges with a loss of $8 million in adjusted EBITDA for 2024 due to a weak lumber pricing environment.
- Cautious buyer sentiment, ample lumber supply, and soft demand in end markets exerted downward pressure on lumber markets throughout the year.
- The multifamily homebuilding segment remains weak due to an oversupply of units and restrictive construction financing, limiting starts.
- The repair and remodel segment has been subdued, particularly in the DIY sector, due to cautious consumer sentiment and higher financing costs.
- PotlatchDeltic Corp (PCH) anticipates no significant contribution from Natural Climate Solutions profit pools in 2025, with major benefits expected in later years.
