Rayonier Earnings: Muted Timber Demand and Lower Prices Weigh on Results

No-moat rated Rayonier reported second-quarter results that were in line with our expectations as the company continued to face substantial end market pressure. Revenue declined over 15% from a year ago, largely due to lower volumes across much of the business. Additionally, consolidated operating margins declined almost 500 basis points to 9.6% as stumpage and sawtimber prices pulled back amid unfavorable market conditions. That said, management tightened its EPS guidance range and reiterated its belief that results would rebound in the second half of the year, most notably in its real estate business as previous transactions are closed in the fourth quarter. We've increased our fair value estimate to $35 per share from $34 due to the time value of money.