Value
5.2/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 8.6 |
| EV/EBITDA | 0.0 |
| p ocf | 3.5 |
| Analyst target | 6.0 |
- ▸P/OCF: 31.5x (FFO proxy — REITs gated off P/E)
WY · Why this verdict
Why Weyerhaeuser (WY) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.0/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The quality score of 2.7 falls below the minimum acceptable floor of 4.0, with free cash flow at -12% of net income — meaning the REIT is not generating sustainable cash to support distributions without external capital — and no competitive moat has been identified. Quality breakdown | Quality score rises above 4.0 and free cash flow turns positive relative to net income within 12 months as timber and real estate market conditions improve. | →Stable |
| CounterTimber REITs inherently carry lumpy free cash flow tied to harvest timing and log price cycles; negative free cash flow in one period often reverses sharply when log prices recover and harvest volumes normalize. | ||
Weyerhaeuser has beaten earnings estimates in all four of the last quarters with an average surprise of 90% — driven largely by a 177% beat and a 120% beat — reflecting significant positive variation relative to analyst earnings models for timber income. Earnings | The beat streak continues for at least 3 of the next 4 quarters, with earnings remaining above consensus expectations even if the magnitude of surprise normalizes below 50%. | →Stable |
| CounterThe 90% average earnings surprise in a REIT suggests analyst earnings models are fundamentally misaligned with actual timber harvest economics, and the beats may reflect one-time asset sales or timing of harvest rather than repeatable operational outperformance. | ||
Weyerhaeuser is in a golden cross configuration, trading above its 200-day moving average, with rising on-balance volume and a bullish MACD — indicating broad-based buying across technical horizons. Chart pattern detection | Price remains above the 200-day moving average and momentum score stays above 5.5 over the next 6 months. | →Stable |
| CounterBullish momentum in a below-quality-floor REIT may reflect a temporary rotation into commodity-linked real estate rather than a durable improvement in underlying timber economics. | ||
Analysts project approximately 26% upside from current prices, and the dividend payout ratio is flagged at 341% — meaning the current payout is not covered by earnings and depends on asset monetization or external financing to sustain. Catalyst breakdown | Dividend coverage improves as earnings per share grow and the payout ratio declines below 200% within 12 months. | →Stable |
| CounterTimber REITs are legally required to distribute most taxable income and routinely report payout ratios above earnings because GAAP earnings understate actual economic cash flow from timber operations. | ||
The quality score of 2.7 falls below the minimum acceptable floor of 4.0, with free cash flow at -12% of net income — meaning the REIT is not generating sustainable cash to support distributions without external capital — and no competitive moat has been identified.
→StableQuality breakdown
- Expectation
- Quality score rises above 4.0 and free cash flow turns positive relative to net income within 12 months as timber and real estate market conditions improve.
CounterTimber REITs inherently carry lumpy free cash flow tied to harvest timing and log price cycles; negative free cash flow in one period often reverses sharply when log prices recover and harvest volumes normalize.
Weyerhaeuser has beaten earnings estimates in all four of the last quarters with an average surprise of 90% — driven largely by a 177% beat and a 120% beat — reflecting significant positive variation relative to analyst earnings models for timber income.
→StableEarnings
- Expectation
- The beat streak continues for at least 3 of the next 4 quarters, with earnings remaining above consensus expectations even if the magnitude of surprise normalizes below 50%.
CounterThe 90% average earnings surprise in a REIT suggests analyst earnings models are fundamentally misaligned with actual timber harvest economics, and the beats may reflect one-time asset sales or timing of harvest rather than repeatable operational outperformance.
Weyerhaeuser is in a golden cross configuration, trading above its 200-day moving average, with rising on-balance volume and a bullish MACD — indicating broad-based buying across technical horizons.
→StableChart pattern detection
- Expectation
- Price remains above the 200-day moving average and momentum score stays above 5.5 over the next 6 months.
CounterBullish momentum in a below-quality-floor REIT may reflect a temporary rotation into commodity-linked real estate rather than a durable improvement in underlying timber economics.
Analysts project approximately 26% upside from current prices, and the dividend payout ratio is flagged at 341% — meaning the current payout is not covered by earnings and depends on asset monetization or external financing to sustain.
→StableCatalyst breakdown
- Expectation
- Dividend coverage improves as earnings per share grow and the payout ratio declines below 200% within 12 months.
CounterTimber REITs are legally required to distribute most taxable income and routinely report payout ratios above earnings because GAAP earnings understate actual economic cash flow from timber operations.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Weyerhaeuser is a timber REIT with four consecutive earnings beats, strong momentum above its 200-day moving average, and 26% analyst upside — but a quality score of only 2.7 out of 10, negative free cash flow, and no competitive moat create a below-floor quality profile that limits conviction despite favorable near-term price action.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
2.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.4 |
| ROA | 0.5 |
| Gross margin | 0.0 |
| Op margin | 3.6 |
| Net margin | 2.9 |
| Current ratio | 5.3 |
| FCF quality | 0.0 |
| Moat | 3.9 |
| Piotroski F | 6.7 |
- ▸Earnings quality RED FLAG: -12% FCF/NI
- ▸No competitive moat
- ▸Quality concerns
Growth
6.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.0 |
| EPS growth | 10.0 |
- ▸Declining revenue: -2%
Momentum
2.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 1.3 |
| OBV | 1.0 |
| MA position | 2.0 |
| Volume | 2.7 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA (recent, shallow — too early to call)
Sentiment
8.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 8.5 |
| Analyst rating | 7.0 |
| Price target | 8.7 |
- ▸LLM news sentiment: +0.70 (n=1)
- ▸Analyst upside: 31%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
3.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.7 |
| quality rank | 0.9 |
| growth rank | 0.7 |
Technical
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.4 |
| support resistance | 8.6 |
| 52w position | 7.4 |
Risk (lower is worse)
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.0 |
| days to cover | 6.2 |
| volatility | 5.0 |
| put call | 4.9 |
| implied vol | 5.3 |
| beta | 7.5 |
| debt equity | 7.5 |
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 5.2 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 353.0%
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (6)
- ASYMMETRY:2.4>=1.5
- INSIDER:OK
- NEWS_BOOST:ANALYST:0.70
- EARNINGS_PROXIMITY:26d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:2.3<4.5
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
2.39
Upside
+14.4%
Downside
6.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 26d with 4/4 beat streak
SuitabilityModerate — Balanced profile
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Technical at 8.1 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:2.3<4.5.
The strongest dimensions are Technical at 8.1, Sentiment at 8.0, and Catalyst at 6.7; the weakest are Momentum at 2.3, Quality at 2.7, and Peer rank at 3.1. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 2.39 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Quality Below Minimum Floor
Trip ifQuality score falls below 2.0, declining more than 0.7 points from the current already below-floor 2.7.
- P2Consistent Earnings Beat Streak
Trip ifEarnings surprise falls below -20% in at least 2 of the next 4 reported quarters, following the unusually large positive surprises of the prior year.
- P3Bullish Momentum With Volume Accumulation
Trip ifPrice drops below $23.33, reaching the stop-loss level and falling more than 5% below the current $24.65.
- P4Analyst Upside With Dividend Sustainability
Trip ifDividend payout ratio rises above 500%, exceeding the current 341% by more than 150 percentage points as earnings deteriorate.