At This Level, Does Buying Weyerhaeuser Company (WY) Makes Sense?

Analysts at BofA/Merrill cut their rating on shares of Weyerhaeuser Company (NYSE:WY) from Buy to Neutral in their opinion released on January 02. Vertical Research analysts bumped their recommendation on WY stock from Hold to Buy in a separate flash note to investors on October 24. Analysts at BofA/Merrill issued an upgrade from Neutral to Buy for the stock, in a research note that dated back to January 24.

By watching the trading activity of corporate insiders, it will become easier to get a sense of Weyerhaeuser Company (NYSE:WY)’s prospects. The earliest insider trade took place on 11/13/2018. Stockfish Devin W gathered a total of 27.89 thousand shares of company at average share price of $26.93. The total for the purchase was set at $751.08 thousand. After this transaction, the Senior Vice President account balance stood at 99.17 thousand shares. The stock lost -10.1 percent since that insider purchase. On 02/23/2018, Hillman Jeanne M, VP & Chief Accounting Officer, sold 15.39 thousand shares at a price per share of $35.22. This removed 542 thousand shares from the insider’s fortune and the stock saw a -31.26 percent retreat in value since the news became public. This transaction left 63.94 thousand shares in the VP & Chief Accounting Officer account. On 11/24/2017, Sr. Vice President Hunter Rhonda D performed a sale transaction worth $843.15 thousand. This sale at $36.12 each has eliminated 23.34 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -32.97 percent decrease since the transaction was reported. The insider now is left with 76.3 thousand shares remaining in the account. Hunter Rhonda D, who performs the Sr. Vice President job, sold 45.94 thousand shares for $1.64 million. The disposal occurred on 11/14/2017 was priced at $35.72 per share. The share price plunged -32.22 percent since the reporting date. Hunter Rhonda D now left with a stake of 76.3 thousand WY stock worth $1.85 million after the insider selling.

Weyerhaeuser Company (WY) is expected to jump by 27.63 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $35-month high price target. This represents a whopping 44.57 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $30, which represents a return potential of 23.92 percent when compared to the closing price of the stock of $24.21 on Friday, January 11. The lowest price target for the stock is $22.5 — slightly more than -7.06 percent from WY’s current share price.

The shares are currently floating around the first support level of $23.83. Below this, the next support is placed in the zone of $23.46. Till the time, the WY stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 55.1 on daily chart, which may remain a cause for concern. If the price breaks below $23.46 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $24.46 mark may result into a pull-back move towards $24.71 level.

WY shares dropped -0.09 points or -0.37 percent on Friday to $24.21 with a light trade volume of 4.48 million shares. After opening the session at $24.27, the shares went as high as $24.34 and as low as $23.71, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $18.2 billion and now has 751.99 million shares outstanding. Weyerhaeuser Company (WY) stock has lost -3.51 percent of market value in 21 trading days.

WY stock has a trailing 3-year beta of 1.55, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $1.53 a share in the trailing twelve months. The stock’s value has surged 10.75 percent year to date (YTD) against a decline of -30.49 percent in 12 month’s time. The company’s shares still trade -36.94 percent away from its 1-year high of $38.39 and 17.98 percent up from 52-week low of $20.52. The average consensus rating on the company is 2, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a buy.

Shares of Weyerhaeuser Company (WY) are trading at a P/E ratio of 63.7 times earnings reported for the past 12 months. The industry WY operates in has an average P/E of 36.4. Its P/E ratio went as low as 35.19X and as high as 55.31 over the 5-year span. Further, it is sporting a 2.38 on the Price-to-Sales ratio. Compare this with the industry average P/S of 8.61. 27.4 percent is the gross profit margin for Weyerhaeuser Company and operating margin sits at 22.1 percent. Along with this, the net profit margin is 14.5 percent.

Analysts are forecasting revenue to suffer decline of -8.1 percent to $1.67B in the next fiscal quarter, while earnings are seen soaring by nearly -58.06 percent to $0.13 per share. History has shown that shares in Weyerhaeuser Company have gone up on 19 different earnings reaction days and are predicted to add 0.02 percent when the company reports upcoming earnings. In last reported earnings results, it earned $0.28 per share, worse than the $0.37, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $1.91B, worse than the $1.98B analysts expected. Earnings are estimated to increase by 54 percent this year, -12.39 percent next year and continue to increase by 5 percent annually for the next 5 years.