Weyerhaeuser Earnings: Pricing Continues to Constrain Results Despite End Market Improvements

No-moat-rated Weyerhaeuser reported fourth-quarter results that were largely in line with our expectations. Weyerhaeuser navigated a challenging year as high interest rates constrained housing markets and weighed on lumber demand. Some of that weakness carried over to the fourth quarter as net sales declined roughly 2.5% year over year, while operating margins expanded 300 basis points to 15.7%, largely due to strength in the timberlands segment. Despite some end market improvements in the fourth quarter, Weyerhaeuser will have to navigate a tricky demand environment and ample industry supply in 2024. We've increased our fair value estimate to $35 per share from $34 due to the time value of money.