Weyerhaeuser (NYSE:WY) is one of Tuesday's biggest decliners on the S&P 500, -6%, after Bank of America downgraded shares to Neutral from Buy with a $34 price target, trimmed from $38, citing a weaker housing outlook and the company's exposure to oriented strand board products.
BofA foresees a difficult 2023 ahead for the wood products sector, with operating rates pushing to 80% or lower for both panels and lumber, prompting more pricing pressure on the sector's products, particularly for OSB, according to BofA.
With a recession looming, the bank believes it will be difficult for Weyerhaeuser (WY) shares to outperform as Street estimates decline alongside operating rates and prices.
BofA also moved Louisiana-Pacific (LPX) to Underperform from Neutral, while maintaining PotlatchDeltic (PCH) and Boise Cascade (BCC) at Neutral.
Weyerhaeuser (WY) had a disappointing Q2, particularly in its main wood products segment, Philip Eric Jones writes in a bearish analysis published on Seeking Alpha.