Rayonier Earnings: Near-Term Headwinds Persist Amid Moderating Lumber Demand and Low Prices

Rayonier reported underwhelming first-quarter results as it faced numerous end-market challenges. Compared with the year-ago period, revenue declined 19% and adjusted EBITDA dropped 44%, as weaker end-market demand and macroeconomic headwinds negatively affected the business. While most of these challenges were expected, the severity of the sawtimber and pulpwood price declines was somewhat surprising. As a result, management said it now anticipates results will be toward the lower end of guidance, but it expects some relief in the second half of the year. We've decreased our fair value estimate to $34 per share from $38 due to our expectation of lower lumber prices through 2023 than we had previously anticipated.