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Quote this valuation with its source: Fair value, Potential value and the price at analysis.
FAQ
WY — frequently asked questions
Is Weyerhaeuser Company overvalued?
In our latest published analysis dated 2026-10-12, WY looks meaningfully overvalued. The price recorded at analysis is 18,9 USD versus our fair value of 11,4 USD; the high endpoint is presented separately as potential value of 15,1 USD. That implies roughly 39.6% downside to fair value at that date.
Our latest published report, analyzed 2026-10-12, gives WY a fair value of 11,4 USD and a potential value of 15,1 USD. The conclusion is triangulated across multiple valuation models and weighted by reliability for Weyerhaeuser Company's archetype; it is a dated research output, not a live price.
Should I buy WY now?
Our latest published rating for WY, analyzed 2026-10-12, is Sell. Weyerhaeuser Company looks meaningfully overvalued at the analysis-date price of 18,9 USD versus fair value of 11,4 USD; potential value is 15,1 USD. This is research for educational purposes, not personalized investment advice.
What are the biggest risks for WY?
The dedicated bear-case section in our report analyzed 2026-10-12 documents Weyerhaeuser Company's material risks, evidence, thresholds, and thesis-invalidation conditions. Scenario-specific explanations remain in that section so the report does not repeat or decontextualize them elsewhere.
What is WY's rating?
Our latest published rating for WY, analyzed 2026-10-12, is Sell, with a published moat assessment of 6.5/10 (Narrow). It reflects our fair value of 11,4 USD, the potential value of 15,1 USD, and the price recorded at analysis (18,9 USD).
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§1 RésuméEN
Réponse en 30 secondesSell
Prix par rapport à la valeur
Cours
$18.94
Juste valeur
$11.44
Valeur potentielle
$15.13
Au
2026-10-12
Pourquoi le scénario peut fonctionner
Rapid single-family residential construction stabilization paired with accelerated monetization of premium data center and clean energy land sites through Strategic Land Solutions at substantial valuation premiums over timber values, supporting $450 million in guided FY2026 SLS EBITDA.
Ce qui changerait notre avis
Sustained elevation in 30-year fixed mortgage rates above 6.5% suppressing North American housing starts below 1.25 million annualized units for two consecutive quarters.
Weyerhaeuser is rated Sell with an intrinsic Fair value of $11.44 per share, as the stock at $18.94 as of October 12, 2026 trades at an unwarranted 65.6% premium to normalized earnings power that discounts an overly aggressive cyclical recovery while overlooking significant debt service obligations and near-term capital intensity.4
Weyerhaeuser Company (NYSE: WY) faces a pronounced valuation disconnect. Trading at $18.94 as of October 12, 2026, the shares sit 65.6% above our intrinsic Fair value midpoint of $11.44, implying a -39.6% return. While the company controls an extraordinary physical asset base encompassing 10.5 million acres of fee timberlands across North America's lowest-cost wood baskets, market sentiment continues to value the entity as a stable infrastructure REIT rather than acknowledging its overwhelming economic exposure to volatile commodity manufacturing. In FY2025, Wood Products generated $4,957 million, or 71.8% of consolidated net sales of $6,905 million, binding corporate earnings power to North American residential homebuilding activity and lumber price swings.
Our valuation synthesis incorporates four distinct underwriting models: enterprise discounted cash flow (FCFFDCF at $11.66), forward earnings ($10.68), discounted earnings ($11.52), and owner earnings ($12.17). Each framework confirms that current market pricing leaves zero margin of safety. While industry mill curtailments and lower European lumber imports have established a seasonal price floor, the recovery trajectory remains heavily constrained by subdued builder sentiment, persistent mortgage rate headwinds, and buyer reluctance to hold channel inventory. Furthermore, consensus expectations fail to fully deduct the burden of $5,448,999,936 in total debt, which carries a 6.78% pre-tax cost of debt and generates ~$370 million in fixed annual interest expense against trough FY2025 operating cash flow of $562 million.2,4,5,6
Capital allocation dynamics also limit near-term equity upside. In FY2026, capital expenditures will remain elevated at an assumed 45% reinvestment rate, driven by approximately $300 million in strategic spending dedicated to modernizing the Monticello facility, following historical capex of $667 million in FY2024 and $474 million in FY2025. Although higher-margin land sales from Strategic Land Solutions offer non-cyclical cash support ($450 million guided EBITDA in FY2026), this capital is largely committed to project completion and fixed debt obligations rather than accelerated share repurchases. Consequently, the risk-reward profile is heavily asymmetric to the downside, supporting our committee rating of Sell.4,5
Scale Advantage & Low-Cost Timber Basin Assets
Ownership of 10.5 million acres of fee timberlands across the US South, Pacific Northwest, and Canada provides captive, low-cost internal log supply for manufacturing mills and shields operations from merchant fiber price spikes. Internal timber harvest provides a permanent biological cost hedge unavailable to non-landowning building material competitors.7
Efficient Scale & Export Infrastructure
Concentrated regional sawmill, oriented strand board, and engineered wood facilities in dense timber basins create local scale efficiencies that make building competing greenfield capacity uneconomic, while established deepwater export infrastructure supports $271 million in high-realization log sales to Japan alongside Canadian cross-border integration generating $543 million.7
Cycle upside
In an expansionary cycle, falling mortgage rates reinvigorate single-family housing starts, prompting aggressive channel restocking and spikes in lumber and oriented strand board prices. Under these conditions, Weyerhaeuser's Wood Products segment leverages high operating gearing to generate substantial operating cash flows, while its low-cost timberlands capture higher sawlog realizations.
Recommandation maison
Sell. Weyerhaeuser's current share price of $18.94 trades 65.6% above intrinsic Fair value of $11.44. While the underlying asset base across 10.5 million timberland acres remains exceptional, market pricing embeds an aggressive cyclical recovery that overlooks commodity manufacturing volatility, $5.45 billion in debt, and near-term capital intensity. Investors should exit positions and avoid new commitments until valuation reflects a substantial margin of safety.4,7
Présentation de l’entreprise
Weyerhaeuser Company (NYSE: WY) is a real estate investment trust (REIT) and one of the largest private timberland owners in North America, controlling approximately 10.5 million acres of productive fee timberlands across key forest basins in the United States and Canada. The company operates through three principal reporting segments: Wood Products, Timberlands, and Real Estate, Energy & Natural Resources (Strategic Land Solutions / REENR).
In FY2025, consolidated revenue totaled $6,905 million. Wood Products contributed $4,957 million (71.8% of total revenue), manufacturing structural lumber, oriented strand board (OSB), and engineered wood products for residential construction. Timberlands generated $2,086 million through biological fee timber harvest, external log sales, and internal supply transfers, while REENR provided $454 million from land monetization, conservation, and clean energy rights. Geographically, the United States accounted for $5,998 million of sales, supported by Canadian operations of $543 million and high-value export log shipments to Japan ($271 million) and other Asian markets.
§2 Cas baissierEN
Our stress test evaluates the financial impact of a prolonged residential construction downturn coupled with persistent macroeconomic inflation and high capital costs. Under this stress case, single-family residential construction remains depressed as mortgage rates stay elevated, keeping framing lumber and oriented strand board prices near industry cash breakeven levels. Consolidated revenue stagnates near $6.9 billion to $7.1 billion, while consolidated operating margins remain compressed near 10.59% due to sticky manufacturing input costs, including rising resin expenses and plant maintenance. Operating cash flow remains depressed below $600 million annually, barely covering fixed pre-tax debt service on $5,448,999,936 of outstanding debt (carrying a 6.78% pre-tax cost of debt, generating ~$370 million in annual interest obligations). With $300 million committed to the Monticello modernization buildout in FY2026, free cash flow turns negative under severe pricing troughs, forcing management to curtail share buybacks, draw upon revolving liquidity, and reconsider discretionary dividend distributions. In this environment, equity valuation contracts sharply toward the lower bound of our valuation models ($9.50), exposing current market buyers at $18.94 to severe downside risk.
Extended depression in structural lumber realizations invalidates the cyclical margin recovery thesis, capping Wood Products profitability near cash breakeven and preventing consolidated earnings expansion toward mid-cycle targets.
Actuel :Lumber composite prices fluctuating near cyclical trough levels with channel buyers refusing to build inventory
Alerte siFraming lumber composite price sustaining below $360 per thousand board feet for two consecutive quarters
§3 Avantage concurrentielEN
Narrow
Weyerhaeuser maintains a Narrow economic moat grounded in structural cost advantages across its 10.5 million acres of fee timberlands and efficient scale across its integrated manufacturing footprint. As the largest private timberland owner in North America, the company operates in prime growing regions, primarily the US South and the Pacific Northwest. These timberlands provide an enduring low-cost source of raw fiber that buffers its downstream Wood Products mills against third-party sawlog inflation. Furthermore, established logistics infrastructure enables direct log exports to premium Asian markets, generating $271 million in revenue from Japan in FY2025, while Canadian operations contributed $543 million.
Despite these significant physical scale advantages, Weyerhaeuser lacks the pricing power and cash flow durability required for a Wide moat rating. Unlike specialized infrastructure REITs such as Crown Castle (CCI), which generates a 46.8% operating margin supported by long-term contractual master lease agreements, Weyerhaeuser generates 71.8% of net sales ($4,957 million of $6,905 million in FY2025) from Wood Products. In this segment, products like 2x4 lumber and oriented strand board are standardized commodities sold into highly competitive clearing markets. When homebuilding activity slows, realizations compress rapidly toward variable production costs.
During cyclical downturns, return on invested capital falls below the computed cost of capital (WACC of 8.03%). In FY2025, operating income fell to $731 million and net income was $324 million. While biological timber growth preserves asset value through market troughs, high capital intensity ($474 million capex in FY2025 and $300 million committed to the Monticello project in FY2026) alongside $5.45 billion in total debt confines economic profit durability to a narrow 5-year to 10-year horizon.
Profit économique
Weyerhaeuser maintains a computed weighted average cost of capital (WACC) of 8.03% and a moderate cost of equity of 8.79%. Over mid-cycle conditions, the company generates returns on invested capital in excess of its cost of capital. However, during commodity price troughs, such as FY2025 when net income declined to $324 million on $6,905 million of revenue, economic profits turn cyclically negative, demonstrating the narrow nature of its competitive advantages.2,6
6.5/ 10
Narrow
Sources of advantage
01Scale Advantage & Low-Cost Timber Basin Assets — Ownership of 10.5 million acres of fee timberlands across the US South, Pacific Northwest, and Canada provides captive, low-cost internal log supply for manufacturing mills and shields operations from merchant fiber price spikes. Internal timber harvest provides a permanent biological cost hedge unavailable to non-landowning building material competitors.Moderate
02Efficient Scale & Export Infrastructure — Concentrated regional sawmill, oriented strand board, and engineered wood facilities in dense timber basins create local scale efficiencies that make building competing greenfield capacity uneconomic, while established deepwater export infrastructure supports $271 million in high-realization log sales to Japan alongside Canadian cross-border integration generating $543 million.Moderate
Menaces connues pour l'avantage
Menace
Gravité
Calendrier
Atténuation
Lumber and structural panel price volatility driven by housing market cycles and substitute building products
high
12 to 24 months
Supply-side discipline through temporary mill curtailments and flexible harvest scheduling, deferring biological timber cut until realizations improve.
The highlighted cell is Fair value when every assumption sits at its base level ($11.44). Each row and column shows what Fair value becomes when one assumption moves.
Free cash flow to the firm stays positive in the first projected year at $387.5M after modeled reinvestment of $317.0M, with terminal value at 80.2% of enterprise value. A sudden drop in free cash flow is not projected unless capital spending relative to revenue, reinvestment, or gross margin resets materially.
In the baseline scenario, Weyerhaeuser executes a gradual, multi-year recovery as residential construction stabilizes and industry mill curtailments tighten commodity wood supply. Operating margins normalize from 10.59% in FY2025 to 10.8% in FY2026 and 14.5% by FY2029-FY2030, supported by 53 internal cost reduction initiatives. Reinvestment rates decline from 45% in FY2026 post-Monticello toward 25% by FY2030. This baseline expected path yields our intrinsic Fair value of $11.44.5,6
Wood Products operating margins expand toward peak levels of 16-18%.
§7 Arbre de décision sur les résultatsEN
Dépassé
Maintain Sell; Maintain zero allocation and use cyclical strength to complete position exits, monitoring whether higher wood realizations persist before re-evaluating normalized earnings power.
Déclencheur: Consolidated revenue and operating margin materially exceeding consensus expectations, driven by higher lumber realizations and faster manufacturing cost reductions
An operational beat reflects temporary lumber price spikes and tight channel inventory rather than permanent structural margin expansion, leaving shares overvalued relative to Fair value.
Conforme
Maintain Sell; Maintain zero allocation and avoid new capital commitments, reviewing segment margins and debt service progress at the next earnings release.
Déclencheur: Revenue and diluted earnings per share aligning with consensus expectations, reflecting gradual housing recovery alongside steady mill operating rates
Results tracking in line with consensus confirm the multi-year recovery path embedded in our baseline valuation, affirming that market pricing remains well above Fair value.
Manqué
Maintain Sell; Execute complete capital exit, avoiding exposure to commodity margin compression and high fixed debt service.
Déclencheur: Wood Products operating margin compressing or consolidated revenue falling below consensus due to persistent housing weakness or resin input cost inflation
An earnings miss confirms that mortgage rate headwinds and cost pressures are impeding the cyclical recovery, widening the gap between actual results and market expectations.
Qualité des résultats
Reported earnings quality reflects cyclical volatility inherent in commodity forest products. While biological timber harvest provides depreciation-shielded cash flow under the real estate investment trust structure, consolidated net income remains heavily impacted by non-cash depletion, cyclical inventory swings, and taxable manufacturing subsidiary provisions. Operating cash flow conversion from net income fluctuates significantly across market cycles, with high fixed interest overhead absorbing a substantial portion of operating cash during trough periods. Free cash flow conversion is further constrained during active modernization investment phases before normalizing as sustaining capital expenditures stabilize.
Dynamique des estimations
Consensus earnings revisions have trended downward across recent quarters, reflecting persistent mortgage rate headwinds, softer residential construction activity, and elevated manufacturing input costs. Analysts have steadily lowered near-term expectations as homebuilders maintain subdued sentiment and buyers resist building channel inventory.
Operating cash flow contracted to $562 million in FY2025 compared to free cash flow of $341 million in FY2024, illustrating severe cyclical compression. Total debt of $5,448,999,936 with a pre-tax cost of debt of 6.78% generates approximately $370 million in annual interest obligations, absorbing over 65% of FY2025 operating cash flow. While capex moderated to $474 million in FY2025, the guided $300 million investment in the Monticello modernization for FY2026 keeps capital commitments elevated, constraining near-term free cash flow generation.2,4,5,6,8
Allocation du capital
Management balances capital allocation across sustaining silviculture, strategic plant modernization ($300 million Monticello project in FY2026), debt service on $5.45B in outstanding obligations, and share repurchases under a recently renewed $1 billion authorization. While management views buybacks as a flexible lever, near-term capital intensity and high fixed debt overhead prioritize debt maintenance and project completion over aggressive equity retirement.
Weyerhaeuser's return on invested capital tracks the wood products commodity cycle, falling to cyclical trough levels in FY2025 (net income $324M on $6,905M revenue). In our house forecast schedule, operating income expands from $731M in FY2025 to $778M in FY2026, $1,024M in FY2027, and $1,253M by FY2030, driving an improving ROIC trajectory as capital intensity moderates.
At the cyclical trough, returns on capital dipped below the computed WACC of 8.03%. As operating margins normalize toward 14.5% by FY2029-FY2030 and reinvestment rates moderate from 45% to 25%, normalized recovers above WACC, supporting narrow durability.
Dernier chiffre d’affaires6,9 Md $USTCAC du chiffre d’affaires +0,9 %
Marge opérationnelle10,6 %10 périodes fiscales
Dernier flux de trésorerie disponible88 M $USFY2025
Dette nette5,1 Md $USFY2025
Décomposition du compte de résultatComment la taille de l’activité se traduit en bénéfice publié.30 juin 2026
StockMarketAgent.AI
Chiffre d'affaires1,9 Md $USCoût des ventes−1,6 Md $USMarge brute311 M $USCharges d’exploitation−88 M $USRésultat d'exploitation223 M $USÉléments hors exploitation et impôts−61 M $USRésultat net162 M $US
Données de l’historique financier
Chiffre d'affaires
1 867 000 000 $US
Coût des ventes
1 556 000 000 $US
Marge brute
311 000 000 $US
Charges d’exploitation
88 000 000 $US
Résultat d'exploitation
223 000 000 $US
Éléments hors exploitation et impôts
-61 000 000 $US
Résultat net
162 000 000 $US
Aperçu du bilanComment les actifs publiés sont détenus et financés pour la période sélectionnée.
StockMarketAgent.AI
Composition des actifsFinancé par
Total de l’actif16,6 Md $USTrésorerie464 M $USActifs courants1,7 Md $USTotal du passif7,2 Md $USPassifs courants1,3 Md $USCapitaux propres9,4 Md $US
Données de ventilation du bilan
Total de l’actif
16 613 000 000 $US
Trésorerie
464 000 000 $US
Actifs courants
1 652 000 000 $US
Total du passif
7 187 000 000 $US
Passifs courants
1 278 000 000 $US
Capitaux propres
9 426 000 000 $US
Passerelle des flux de trésorerieComment le flux de trésorerie d’exploitation est devenu du flux de trésorerie disponible en FY2025.
StockMarketAgent.AI
Rapprochement des flux d’exploitation
Résultat net324 M $USDotations aux amortissements+509 M $USRémunération en actions+43 M $USAutres ajustements opérationnels−314 M $USFlux de trésorerie d'exploitation562 M $US
Rapprochement de la trésorerie d’ouverture à la clôture
Trésorerie d’ouverture684 M $USFlux de trésorerie d'exploitation+562 M $USFlux d’investissement−475 M $USFlux de financement−290 M $USTrésorerie de clôture481 M $US
562 M $US − 474 M $USFlux de trésorerie disponible 88 M $US
Données de la passerelle des flux de trésorerie
Résultat net
324 000 000 $US
Entrées d’exploitation
876 000 000 $US
Dotations aux amortissements
509 000 000 $US
Rémunération en actions
43 000 000 $US
Flux de trésorerie d'exploitation
562 000 000 $US
Sorties d’exploitation
314 000 000 $US
Trésorerie disponible
1 246 000 000 $US
Trésorerie d’ouverture
684 000 000 $US
Sorties d’investissement
475 000 000 $US
Capex
474 000 000 $US
Autres activités d’investissement
1 000 000 $US
Sorties de financement
290 000 000 $US
Émission nette de dette
487 000 000 $US
Rachats d’actions
160 000 000 $US
Dividendes versés
606 000 000 $US
Autres activités de financement
11 000 000 $US
Trésorerie de clôture
481 000 000 $US
Flux d’investissement
-475 000 000 $US
Flux de financement
-290 000 000 $US
Chiffre d’affaires par activitéPart du chiffre d’affaires total pour 2026-06-30.
1,9 MdChiffre d’affaires total
Chiffre d’affaires par activitéPart
Cost of1,6 Md83,3 %
Autres311 M16,7 %
Données de répartition du chiffre d’affaires: Chiffre d’affaires par activité
Chiffre d’affaires par activité
Chiffre d'affaires
Part
sur un an
Cost of
1,6 Md
83,3 %
—
Other
311 M
16,7 %
—
Chiffre d’affaires par zone géographiquePart du chiffre d’affaires total pour 2025-12-31.
6,9 Md $USChiffre d’affaires total
Chiffre d’affaires par zone géographiquePart
United States6 Md $US86,9 %−2,5 % sur un an
Canada543 M $US7,9 %−1,5 % sur un an
Japan271 M $US3,9 %+5 % sur un an
Autres61 M $US0,9 %+24,5 % sur un an
South Korea21 M $US0,3 %−12,5 % sur un an
China11 M $US0,2 %−88 % sur un an
Source: SEC EDGAR · Déposé le 2026-02-13 · SEC EDGAR
Données de répartition du chiffre d’affaires: Chiffre d’affaires par zone géographique
Chiffre d’affaires par zone géographique
Chiffre d'affaires
Part
sur un an
United States
6 Md $US
86,9 %
-2,5 %
Canada
543 M $US
7,9 %
-1,5 %
Japan
271 M $US
3,9 %
5 %
Other
61 M $US
0,9 %
24,5 %
South Korea
21 M $US
0,3 %
-12,5 %
China
11 M $US
0,2 %
-88 %
Chiffre d’affaires et résultatsComment la taille de l’activité se traduit en bénéfice publié.
Trésorerie et detteLiquidités disponibles face à l’endettement total.
Génération de trésorerieFlux de trésorerie d’exploitation comparé au flux de trésorerie disponible.
RentabilitéÉvolution des marges brute, opérationnelle et nette.
Données financières ponctuelles utilisées dans l’analyse du 2026-10-12.
Weyerhaeuser Company (WY) trades at 29.1x forward earnings against a peer median of 35.1x. Its EV/EBITDA of 27.2x compares with a peer median of 21.1x. The comparison uses 4 peers: Crown Castle Inc., SBA Communications Corporation, Iron Mountain Incorporated and Digital Realty Trust Inc., as of 2026-10-12.
§10 Secteur et cycleEN
Phase du cycle
Trough
Industry benchmarks indicate capex-to-revenue of 12.7% and capex-to-depreciation of 0.17. Weyerhaeuser's own capex moderated to $474 million in FY2025 from $667 million in FY2024 and $680 million in FY2023, with project spending of $300 million on Monticello scheduled for FY2026. Concurrently, widespread sawmill curtailments across North America and reduced European lumber imports have curtailed supply.4,5
Cycle haussier
In an expansionary cycle, falling mortgage rates reinvigorate single-family housing starts, prompting aggressive channel restocking and spikes in lumber and oriented strand board prices. Under these conditions, Weyerhaeuser's Wood Products segment leverages high operating gearing to generate substantial operating cash flows, while its low-cost timberlands capture higher sawlog realizations.
Cycle baissier
In a contractionary cycle, sustained mortgage rate elevation dampens homebuilder confidence and housing starts, suppressing wood products demand. Commodity prices languish near cash breakeven, forcing mill curtailments, while fixed interest overhead on $5.45B of debt and sustained modernization capex erode free cash flow.
Tendances séculaires
Tendance
Impact
Note
Structural Underbuilding in US Single-Family Housing
positive
A decade of cumulative underbuilding relative to demographic household formation provides a secular foundation for residential construction and building materials demand as affordability constraints ease.
Alternative Land Monetization for Clean Energy and Data Centers
positive
Surging demand for power infrastructure and AI data centers enables Weyerhaeuser to monetize select acreage at significant valuation premiums over timber values through Strategic Land Solutions.
Positionnement
Weyerhaeuser is positioned as North America's lowest-cost integrated wood producer, combining 10.5 million acres of fee timberlands with efficient manufacturing facilities. Internal fiber supply shields processing operations from third-party log cost spikes, while established export terminals enable volume redirection to Japan and Asia when domestic markets soften. However, its commodity-heavy sales mix (71.8% Wood Products) leaves it far more cyclically exposed than specialized infrastructure REITs.3,7
§11 Gestion de positionEN
Taille de position
0%
With our committee rating at Sell and shares trading at $18.94 as of October 12, 2026, representing a 65.6% premium to intrinsic Fair value ($11.44), zero portfolio capital should be allocated to Weyerhaeuser.4
Risque
Given high operating leverage to commodity lumber and structural panels, exposure must be strictly managed around macroeconomic housing indicators, mortgage rate trends, and channel inventory movements. High fixed debt obligations of $5.45B require close scrutiny of quarterly operating cash flow to ensure capital expenditure commitments do not impair solvency.
Tranches d'entrée
Niveau
Action
Pourquoi
Above $15.13 ($18.94 as of October 12, 2026)
Avoid / No Position
Trading above the bull-case potential value ceiling ($15.13) offers highly negative risk-adjusted expected return.
$11.44 (Baseline Fair Value)
Monitor / Watchlist
Reaching Fair value eliminates the 65.6% price premium but provides no margin of safety against cyclical housing .
Tranches de sortie
Niveau
Action
$18.94 as of October 12, 2026
Full Exit / Liquidate remaining long exposure
$20.00 to $22.00
Aggressive Exit on any transitory liquidity bounce
With technical momentum weakening below moving averages and consensus earnings estimates facing negative revisions, unfavorable risk-reward makes long exposure unattractive.
Income and REIT Investor
Avoid
Unlike infrastructure REIT peers offering contractual cash flow stability, Weyerhaeuser's dividend is underpinned by highly volatile commodity manufacturing profits and constrained by $5.45B in debt obligations.4
Long-Term Value Investor
Avoid
Trading at a 65.6% premium to intrinsic Fair value of $11.44, the current valuation provides zero margin of safety, leaving investors exposed to substantial capital loss if housing market recovery falters.
§14 Recommandation finaleEN
Action
Vendre
Weyerhaeuser is rated Sell. At $18.94 per share, the stock trades at an unjustified 65.6% premium to our intrinsic Fair value of $11.44. While the company owns premier fee timberland assets, its earnings are dominated by commodity Wood Products manufacturing (71.8% of net sales). Current pricing reflects an aggressive cyclical recovery that understates persistent mortgage rate headwinds, $5.45 billion in debt, and elevated project capital spending ($300 million Monticello project in FY2026).4,5,7
The implied return of -39.6% represents a heavily negative risk-reward profile. Even under an optimistic Bull scenario where fair value reaches $15.13, current market pricing remains 25.2% above that potential value ceiling. Investors should liquidate holdings and avoid initiating positions until market prices contract into an adequate margin-of-safety band.
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Sources
The records this analysis drew on, as they stood when it was run.
Analyst consensusData as of 2026-10-12 · Published 2026-10-12 · Provider-adjusted · cited for 3 figuresCited in Cas baissier, Scénarios
Financial statementsData as of 2024-12-31 · Published 2026-10-11 · cited for 1 figureCited in Historique financier
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
FY2027 diluted EPS tracks toward the lower consensus dispersion boundary of $0.30.1
Capital intensity remains elevated due to sustained manufacturing maintenance, deferring share repurchases.4,5
In the downside scenario, prolonged high mortgage rates suppress single-family residential construction, dampening builder sentiment and preventing lumber channel restocking. Wood Products operating margins remain constrained near trough levels of 10-11%, while rising resin costs, transportation bottlenecks, and elevated mill maintenance absorb cash generation. Fixed debt service on $5.45B of debt obligations severely limits discretionary capital allocation and dividend growth.
Terminal multiple derating as the market prices Weyerhaeuser as a volatile commodity manufacturer rather than a specialized asset REIT.
Unlike specialized tower REIT peers trading at 22x-28x forward P/E due to long-term contracted digital leases, WY operates in volatile commodity timber with net income of $324M and total debt of $5.45B. Persistent exposure to unhedged lumber price swings justifies a terminal multiple de-rating from 18.5x toward 14.8x, eroding intrinsic value by -18.6%.3,4,6
FV impact
-5.6%
Terminal multiple 20% lower
Trigger
Within 36 months
Higher-for-longer interest rate regime expands equity risk premium and raises the cost of capital.
Weyerhaeuser carries $5,448,999,936 in debt with pre-tax cost of debt of 6.78%. A 100 bps shock above moderate Ke of 8.79% to 9.79% raises WACC above 8.03%, reducing discounted cash flow values by -15.4%.2,4
Inability to expand operating margins toward the 14.5% steady-state target confirms that input cost inflation in chemical resins and maintenance costs outweigh sawmill curtailment benefits.
Actuel :10.59% in FY2025
Alerte siConsolidated operating margin sustaining below 11.5% across the explicit forecast horizon
04
Timberlands segment operating cash generation
Structural impairment in biological fee harvest realizations or persistent Asian export weakness erodes the defensive cash flow floor underpinning the REIT structure.
Actuel :$2,086 million in FY2025 revenue with $271 million in Japan exports
Alerte siTimberlands annual operating EBITDA falling below $400 million
Fixed debt overhead absorbing over two-thirds of trough cash flow threatens discretionary capital deployment and liquidity reserves during extended housing downturns.
Actuel :$5,448,999,936 total debt generating ~$370M in pre-tax interest overhead against FY2025 operating cash flow of $562 million
Alerte siOperating cash flow to pre-tax interest obligations falling below 1.5x on a trailing twelve-month basis
Manufacturing input inflation in chemical resins, plant maintenance, and transportation logistics
medium
6 to 18 months
Active internal cost control across 53 separate manufacturing efficiency initiatives and price pass-through mechanisms on engineered products.5
Catastrophic wildfire, drought, and pest infestation across standing biological inventory
medium
Ongoing
Geographic diversification across independent forest basins in the South, Pacific Northwest, and Canada, paired with proactive silviculture and fire break maintenance.5
Discounted forecast-period cash flows (3,71 $US) plus discounted terminal value (15,04 $US) minus signed per current share (7,09 $US) equals the 11,66 $US lens value shown above. Negative net debt is , so subtracting it raises value.
In the upside scenario, rapid single-family housing stabilization accelerates lumber and OSB pricing, driving Wood Products operating margins toward peak cycle levels while non-cyclical Strategic Land Solutions and data center site sales deliver high-margin cash flow. Completion of the $300M Monticello investment normalizes capex toward sustaining maintenance levels, releasing free cash flow to fund share repurchases under the authorized program. Under these conditions, intrinsic value reaches the potential value ceiling of $15.13.4,5
Monticello Modernization Capital Execution
ActuelUnder active buildout during FY2026 with capital intensity expected to moderate upon operational commissioning.
Pourquoi c'est important
Capital expenditures dedicated to Monticello represent a substantial investment phase commitment; timely completion is essential to lower unit manufacturing costs and normalize free cash flow conversion.5
03
Métrique:
Strategic Land Solutions Monetization
ActuelManagement expanded full-year guidance for the segment while noting customary intra-year quarterly closing timing variations.
Pourquoi c'est important
Higher-value land transactions, including data center and clean energy site sales, provide non-cyclical cash flow at significant premiums over traditional timberland values.5
ActuelConstrained by rising chemical resin costs, elevated mill maintenance expenses, and transportation bottlenecks.
Pourquoi c'est important
Manufacturing margins reflect unit cost discipline and input inflation absorption, governing whether consolidated earnings power recovers in line with house forecast schedules.6
Annual interest overhead of ~$370M restricts discretionary free cash flow during trough years and leaves little flexibility for dividend expansion.
Monticello modernization temporarily elevates capital intensity before normalized cash conversion.
Guided FY2026 project capex of $300M elevates reinvestment rates to 45% before tapering toward 25% by FY2030.
Free cash flow expansion is delayed until FY2027-FY2028 when major capital spending concludes and unit cost reductions take effect.
Strategic Land Solutions provides high-margin non-cyclical cash support.
SLS guided for $450M in FY2026 EBITDA with low operating cost basis of 15% to 20%.
High-value land monetization cushions cash generation during cyclical manufacturing troughs.
Geographic export channels provide structural realization buffers during North American downturns.
Japan log shipments generated $271M and Canadian operations provided $543M in FY2025.
International trade corridors allow volume redirection away from soft domestic framing lumber markets to capture higher sawlog realizations abroad.
Iron Mountain IncorporatedIRM
Cours / juste valeur
Juste valeur47,63 $USReport-date price113,39 $US
Date d’évaluation
Avantage concurrentielNarrow
Score d’investissement54 / 100
Digital Realty Trust, Inc.DLR
Cours / juste valeur
Juste valeur134,6 $USReport-date price178,61 $US
Date d’évaluation
Avantage concurrentielNarrow
Score d’investissement49 / 100
Marge
WY
Weyerhaeuser Company
$13.7B
29.1x
2.0x
27.2x
5.0%
—
CCI
Crown Castle Inc.
$34.5B
27.9x
8.3x
20.9x
—
46.8%
SBAC
SBA Communications Corporation
$19.5B
22.5x
6.8x
18.7x
—
52.2%
IRM
Iron Mountain Incorporated
$34.3B
42.2x
4.5x
21.3x
—
19.1%
DLR
Digital Realty Trust Inc.
$68.0B
65.2x
10.1x
27.2x
2.9%
25.9%
Elevated Cost of Capital and Higher-for-Longer Interest Rates
negative
Sustained high borrowing costs elevate mortgage rates, depressing buyer affordability, while increasing corporate debt service costs on $5.45B in debt.
