Have you been paying attention to shares of RayonierRYN ? Shares have been on the move with the stock up 3.9% over the past month. RYN hit a new 52-week high of $39.16 in the previous session. Rayonier has gained 23.4% since the start of the year compared to the -6.6% move for the Construction sector and the 6.2% year-to-date return for its peer group.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on May 2, 2018, Rayonier reported EPS of $0.31 versus the Zacks Consensus Estimate of $0.16 while it beat the consensus revenue estimate by 6.45%.
For the current fiscal year, Rayonier is expected to post earnings of $0.72 per share on $774.4 million in revenues. This represents a 10.77% change in EPS on a -3.05% change in revenues. For the next fiscal year, the company is expected to earn $0.74 per share on $807.25 million in revenues. This represents a year-over-year change of 1.74% and 4.24%, respectively.
Rayonier may be at a 52-week high right now, but what might the future hold for RYN? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Rayonier has a Value Score of F. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 54X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 23.9X versus its peer group's average of 11.7X. Additionally, the stock has a PEG ratio of 10.8. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Rayonier Inc. Price and Consensus
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Rayonier currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 and Style Scores of A or B, it looks as if Rayonier passes the test. Thus, it seems as though RYN shares could still be poised for more gains ahead.
How Does Rayonier Stack Up to the Competition?
Shares of Rayonier have been rising, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also solid potential picks, including Louisiana-Pacific LPX , Armstrong World Industries AWI , and United Rentals URI , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 6% of all the industries we have in our universe, so it looks like there are some nice tailwinds for RYN, even beyond its own solid fundamental situation.