Weyerhaeuser
WY
$25.03
+6.51%
Weyerhaeuser Company is a leading forest products company operating through timberlands, wood products, and real estate segments, structured as a real estate investment trust (REIT). As one of the world's largest private timberland owners, it benefits from a unique competitive position with scale and tax advantages on timber harvest earnings. The current investor narrative centers on cyclical headwinds from housing market weakness and declining lumber prices, which have pressured revenue and margins, while the company's dividend yield and capital return framework provide a floor for the stock.…
WY
Weyerhaeuser
$25.03
Related headlines
WY 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Weyerhaeuser's 12-month outlook, with a consensus price target around $31.09 and implied upside of +24.2% versus the current price.
Average Target
$31.09
0 analysts
Implied Upside
+24.2%
vs. current price
Analyst Count
—
covering this stock
Price Range
$27 - $38
Analyst target range
The stock is covered by 11 analysts, with a consensus recommendation of 'Buy' (mean rating 1.67 on a 1-5 scale). The average target price is $31.09, implying 29.9% upside from the current price of $23.94. The distribution leans bullish, with recent ratings from Raymond James (Strong Buy), DA Davidson (Buy), and JP Morgan (Overweight), while Truist Securities maintains a Hold. The target range spans from $27.00 (low) to $38.00 (high). The high target of $38.00 assumes a significant recovery in housing demand and lumber prices, leading to multiple expansion and earnings growth. The low target of $27.00 prices in continued cyclical weakness and margin compression. The wide spread ($11.00) reflects high uncertainty around the timing of the housing cycle recovery. Recent analyst actions show no downgrades, with upgrades from Raymond James (to Strong Buy) and consistent Buy ratings from Citigroup and DA Davidson, indicating growing conviction in a turnaround.
Bulls vs Bears: WY Investment Factors
Weyerhaeuser presents a classic cyclical value trap debate. The bull case rests on a housing recovery that would boost lumber demand and earnings, supported by a strong analyst consensus (29.9% upside) and a near-52-week low entry point. The bear case highlights deteriorating fundamentals: negative free cash flow, declining margins, and a trailing P/E of 52.6x that prices in optimistic recovery. The single most important tension is whether the housing market will rebound in the next 12 months—if it does, WY could re-rate sharply; if not, the dividend may be cut and the stock could test its 52-week low. Currently, the bearish evidence from financials and technicals is stronger, but the valuation on forward earnings and analyst targets offers a compelling risk/reward for patient investors.
Bullish
- Strong Analyst Consensus and Upside: 11 analysts rate WY a Buy (mean 1.67/5) with an average target of $31.09, implying 29.9% upside from $23.94. The high target of $38.00 suggests potential for 58.7% gains if housing recovers.
- REIT Structure Provides Tax Advantages: As a REIT, WY avoids federal income tax on timber harvest earnings, enhancing cash flow. This structural advantage supports a 3.55% dividend yield, offering income while waiting for cyclical recovery.
- Near 52-Week Low Offers Value Entry: At $23.94, the stock is only 13.1% above its 52-week low of $21.16, providing a limited downside cushion. The P/S ratio of 2.47x is well below its 5-year average of ~10x, suggesting sales-based undervaluation.
- Potential Short Squeeze Catalyst: With a short ratio of 3.97 days to cover, elevated bearish positioning could fuel a sharp rally on positive news (e.g., housing data beat). This technical setup adds asymmetric upside.
Bearish
- Negative Free Cash Flow and Dividend Risk: TTM free cash flow is -$414 million, and the payout ratio of 187% indicates dividends exceed earnings. This raises sustainability concerns, especially if cash burn continues.
- Declining Revenue and Margin Compression: Q1 2026 revenue fell 2.0% YoY to $1.727B, and gross margin dropped from 20.8% to 18.4% over the past year. Operating margin also declined, reflecting pricing pressure in wood products.
- High Valuation on Trailing Earnings: Trailing P/E of 52.6x is far above the industry median of ~20x, implying the market is pricing in a strong recovery that may not materialize. Even forward P/E of 35.9x remains elevated.
- Sustained Underperformance vs Market: WY has declined 6.8% over the past year versus the S&P 500's +16.5%, with negative relative strength across all timeframes (1-month -6.2%, 1-year -23.2%). This persistent weakness suggests structural headwinds.
WY Technical Analysis
Weyerhaeuser is in a sustained downtrend, with the stock declining 6.8% over the past year compared to the S&P 500's 16.5% gain. The current price of $23.94 sits at 27.5% of its 52-week range ($21.16–$27.75), near the low end, suggesting bearish sentiment and potential value opportunity if fundamentals stabilize. The 1-year relative strength of -23.2% underscores significant underperformance versus the market. Short-term momentum remains negative, with a 1-month price change of -5.4% and a 3-month change of -4.4%, indicating continued selling pressure. The 1-month relative strength of -6.2% versus the S&P 500 confirms the stock is losing ground even as the market rallies. This divergence—short-term weakness within a longer-term downtrend—suggests no clear reversal signal yet, though the pace of decline may be decelerating. Key support lies at the 52-week low of $21.16; a breakdown below this level could trigger further downside toward $20. Resistance is at the 52-week high of $27.75, and a breakout above would signal a trend reversal. With a beta of 0.91, the stock is slightly less volatile than the market, but its high short ratio of 3.97 indicates elevated bearish positioning, which could fuel a short squeeze on positive catalysts.
Beta
0.91
0.91x market volatility
Max Drawdown
-20.4%
Largest decline past year
52-Week Range
$21-$28
Price range past year
Annual Return
-0.1%
Cumulative gain past year
| Period | WY Return | S&P 500 |
|---|---|---|
| 1m | +6.2% | +0.2% |
| 3m | +4.3% | +3.7% |
| 6m | -2.9% | +8.0% |
| 1y | -0.1% | +18.2% |
| ytd | +5.2% | +9.6% |
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WY Fundamental Analysis
Revenue has been declining, with Q1 2026 revenue of $1.727 billion down 2.0% year-over-year, and the trailing twelve-month trend shows deceleration from $1.939 billion in Q2 2024. The Wood Products segment generated $1.164 billion in revenue, while Timberlands contributed $492 million, with Wood Products facing pricing pressure from lower lumber demand. The revenue decline reflects cyclical housing weakness, and the investment case hinges on a recovery in homebuilding activity. Profitability is under pressure: net income in Q1 2026 was $156 million, down from $173 million in Q2 2024, and gross margin compressed to 18.4% from 20.8% a year earlier. Operating margin fell to 14.3% from 13.9% in Q2 2024, while net margin improved to 9.0% from 8.9% due to lower taxes. The company remains profitable, but margin compression signals cost headwinds and pricing challenges. The balance sheet is moderately leveraged with a debt-to-equity ratio of 0.59 and a current ratio of 1.29, indicating adequate liquidity. However, free cash flow was negative $60 million in Q1 2026 and negative $414 million on a TTM basis, driven by high capital expenditures and working capital outflows. ROE is low at 3.4%, reflecting weak earnings relative to equity. The negative free cash flow raises concerns about dividend sustainability, though the payout ratio of 187% suggests dividends exceed earnings, funded by debt or asset sales.
Quarterly Revenue
$1.7B
2026-03
Revenue YoY Growth
-2.0%
YoY Comparison
Gross Margin
18.4%
Latest Quarter
Free Cash Flow
$-414000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is WY Overvalued?
Since net income is positive, the primary valuation metric is the P/E ratio. The trailing P/E is 52.6x, while the forward P/E is 35.9x, implying the market expects earnings growth to improve. The gap between trailing and forward multiples suggests optimism about a cyclical recovery. Compared to the industry average (Paper, Lumber & Forest Products), Weyerhaeuser trades at a premium: the trailing P/E of 52.6x is well above the sector median of roughly 20x, reflecting its REIT structure and timberland asset base. The P/B ratio of 1.81x is near the industry average, while the EV/EBITDA of 21.3x is elevated, indicating a premium for its land holdings. Historically, the trailing P/E has ranged from 6.3x (Q2 2021) to 516.7x (Q4 2022), with the current 52.6x near the higher end of the range, suggesting the market is pricing in optimistic earnings recovery. The P/S ratio of 2.47x is below the 5-year average of ~10x, indicating that on a sales basis, the stock is relatively cheap, but this is distorted by low margins.
PE
52.6x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 6x~67x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
21.3x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Weyerhaeuser's financial health is strained by negative free cash flow of -$414 million TTM, driven by high capex and working capital needs. The dividend payout ratio of 187% means dividends are not covered by earnings, increasing the risk of a cut if cash flow does not improve. Debt-to-equity of 0.59 is manageable, but the current ratio of 1.29 provides only a thin liquidity buffer. Revenue has declined 2.0% YoY, and gross margin compressed from 20.8% to 18.4%, indicating cost pressures and weak pricing power in wood products.
Market & Competitive Risks: The stock's beta of 0.91 suggests slightly less volatility than the market, but its high trailing P/E of 52.6x (vs. industry ~20x) exposes it to multiple compression if earnings disappoint. The housing cycle is the primary macro driver; rising interest rates or a recession could further depress lumber demand. The short ratio of 3.97 indicates elevated bearish sentiment, which could exacerbate downside on negative news. Recent news of a dividend declaration provides some stability, but does not address the underlying cyclical headwinds.
Worst-Case Scenario: A prolonged housing downturn, combined with continued negative free cash flow, could force a dividend cut and erode investor confidence. In this scenario, the stock could fall to its 52-week low of $21.16, representing an 11.6% decline from the current price of $23.94. If broader market weakness compounds, a drop to $20 (16.5% downside) is plausible, based on historical support levels. The realistic downside from current levels is approximately -11.6% to -16.5%.