Weyerhaeuser Earnings: Lumber Prices Weigh on Results Despite Uptick in Demand

No-moat-rated Weyerhaeuser reported solid second-quarter results given the current lumber market. Revenue fell almost 33% year over year as its wood products and timberland businesses both experienced double-digit declines. Weyerhaeuser’s consolidated operating margins decreased roughly 400 basis points from a year ago to 16% but improved sequentially due to a strong demand for engineered wood products. Weyerhaeuser now faces a challenging second half of the year as rising interest rates continue to pressure housing markets and lumber demand. Nevertheless, we maintain our $35 fair value estimate.