Analyst Note| Charles Gross |
Rayonier suffered a fairly bruising first quarter in New Zealand, as the country deemed timber harvesting nonessential and pricing retreated amid fewer Asian log purchases. However, as purchasing moved to the Pacific Northwest from New Zealand, prices rose, generating better-than-expected EBITDA margins in the segment. Even though management expects to harvest fewer tons this year amid falling demand, our expectations beyond 2020 remain intact. Accordingly, we have left our $18.50 per share fair value estimate in place for no-moat Rayonier.