Weyerhaeuser Co WY

Weyerhaeuser Earnings: Stagnant Housing Markets Compound Wood Product Headwinds

No-moat-rated Weyerhaeuser reported second-quarter results that were largely in line with our expectations. Net sales declined 3% year over year as Weyerhaeuser continued to navigate challenging wood product markets. Consolidated operating margins declined roughly 200 basis points from a year ago to 13.9%. Housing markets remain a challenge for Weyerhaeuser as higher interest rates have stagnated existing home sales while repair and remodel demand remains soft. While some near-term pressures remain, strength in new residential construction should provide support to lumber markets until existing home sales recover. As such, we have maintained our $35 fair value estimate.