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 .
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Weyerhaeuser, Louisiana-Pacific cut at BofA on weakening wood products outlook