WY

What You May Have Missed About Weyerhaeuser Company (WY)

We've been asking ourselves recently if the market has placed a fair valuation on Weyerhaeuser Company. Let's dive into some of the fundamental values of this large-cap Real Estate company to determine if there might be an opportunity here for value-minded investors.

Weyerhaeuser Company's Valuation Is in Line With Its Sector Averages:

Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. The company belongs to the Real Estate sector, which has an average price to earnings (P/E) ratio of 24.81 and an average price to book (P/B) ratio of 2.24. In contrast, Weyerhaeuser Company has a trailing 12 month P/E ratio of 30.7 and a P/B ratio of 2.15.

Weyerhaeuser Company's PEG ratio is 5.61, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.

Overview of the Company's Finances:

2018-02-16 2019-02-15 2020-02-14 2021-02-19 2022-02-18 2023-02-17
Revenue (MM) $7,196 $7,476 $6,554 $7,532 $10,201 $10,184
Operating Margins 20% 19% 9% 20% 35% 30%
Net Margins 8.0% 10.0% -1.0% 11.0% 26.0% 18.0%
Net Income (MM) $582 $748 -$76 $797 $2,607 $1,880
Net Interest Expense (MM) -$353 -$315 -$348 -$346 -$308 -$245
Depreciation & Amort. (MM) -$521 -$486 -$510 -$472 -$477 -$480
Earnings Per Share $0.77 $0.99 -$0.1 $1.07 $3.47 $2.53
EPS Growth n/a 28.57% -110.1% 1170.0% 224.3% -27.09%
Diluted Shares (MM) 757 757 746 748 751 743
Free Cash Flow (MM) $1,392 $1,539 $1,350 $1,810 $3,600 $3,300
Capital Expenditures (MM) -$190 -$427 -$384 -$281 -$441 -$468
Net Current Assets (MM) -$7,445 -$6,601 -$6,618 -$6,083 -$3,750 -$3,845
Long Term Debt (MM) $6,232 $5,419 $6,147 $5,325 $5,099 $4,071
Net Debt / EBITDA 2.92 3.35 5.54 2.5 0.79 0.98

Weyerhaeuser Company has weak revenue growth and a flat capital expenditure trend, average net margins with a positive growth rate, and irregular cash flows. In addition, we note a decent current ratio. We also note that the company benefits from positive EPS growth and healthy leverage. Furthermore, Weyerhaeuser Company's financial statements do not display any obvious red flags.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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