Weyerhaeuser Earnings: Sequential Volume Improvements Offset by Housing Market Headwinds

No-moat-rated Weyerhaeuser reported somewhat underwhelming third-quarter results as the company continued to navigate a challenging operating environment. Net sales fell over 11% year over year as the wood product and timberland segments recorded double-digit declines. The company's consolidated operating margins decreased roughly 250 basis points from a year ago to 17.5% but improved again sequentially due to solid performance in the wood products business. Nevertheless, Weyerhaeuser faces a difficult fourth quarter as higher mortgage rates constrain housing markets and limit demand for wood products. As such, we've decreased our fair value estimate to $34 from $35 due to our expectation of lower wood product volumes through 2023 than we had previously anticipated.