D.A. Davidson Downgrades Weyerhaeuser On Valuation

D.A. Davidson has downgraded Weyerhaeuser Co (NYSE: WY) to Neutral as shares approach its $33 price target, which the brokerage retained.

Shares of Weyerhaeuser declined to about $22 in January, rebounded to $32 in April, fell to about $27 with the Brexit decision and rebounded to about $33 on Friday. Weyerhaeuser shares closed Friday's session at $32.88.

"With WY stock essentially at our target, we are downgrading from Buy to NEUTRAL," analyst Steven Chercover wrote in a note.

However, the analyst trimmed his FY16 EPS estimate by $0.09 to $0.53 due to a higher than anticipated full year share count and the elimination of the residual contribution from the paper segment that offsets a higher contribution from wood. That said, the FY17 estimates go up $0.02 to $1.01, thanks to the full year benefit of higher Wood Products earnings.

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"The accuracy of estimates could be challenged until the PCL deal is 'anniversaried'; the basis of land sales moves around, not to mention the volatility associated with the lumber and panel business," Chercover noted.

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