Weyerhaeuser Earnings: Export Markets Soften, but Domestic Demand and Pricing Remain Steady

No-moat Weyerhaeuser reported first-quarter results that came mostly as we expected. Net sales declined 4.5% year over year as the wood products and timberland segments both saw declines. Weyerhaeuser and its competitors continue to navigate a challenging environment for wood products in North America due to a stagnant housing market and soft repair and remodel activity. Additionally, export markets remain pressured, especially in China, where demand was muted in the first quarter. That said, we expect growth in both single-family housing starts and repair and remodel markets in 2024, which should drive demand for both lumber and engineered wood products. We have maintained our $35 fair value estimate, as an increase from the time value of money was offset by slightly lower wood-product volumes in our forecast.