Weyerhaeuser Co
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
$77.00 | Mcmd | Kvkwtzd |
Lower Lumber Prices and Higher Rates Raise Concerns for Weyerhaeuser, but Shares Look Attractive
Business Strategy and Outlook
Weyerhaeuser is one of the world’s largest forest product producers and is the largest private timberland owner in North America. Weyerhaeuser is a real estate investment trust, or REIT, and distributes its REIT income to shareholders without having to pay corporate level incomes taxes. The firm operates with significant wood product production capacity in Canada and the United States. Homebuilding, remodeling, and construction are the main uses of softwood lumber and engineered wood products in North America. Weyerhaeuser is closely tied to the North American market as it accounted for over 90% of sales in 2021 (85% in U.S. and 7% in Canada). As price-takers, Weyerhaeuser and its peers see dramatic profit variations depending on the health of housing markets and overall economic conditions.