Forest products maker Weyerhaeuser Company ( WY ) on Friday caught a big downgrade from analysts at Deutsche Bank.
The firm said it cut its rating on WY from "Hold" to "Sell" while lowering its price target from $24 to $19. That new target suggests a 14% downside to the stock's Thursday closing price of $22.07.
A Deutsche analyst commented, "Our call is driven by two factors. First, evidence is mounting of a downward correction in West Coast log mkts. The second issue is the growing evidence that 2011 will represent another 'lost year' for WY's RE and WP divisions. Depending on how rough markets get as we move through the summer and into the autumn, the stock could even trade a bit lower as ST investors trim positions. The stock has been heavily promoted in recent months by 'timber bulls' and driven by the big gains in Chinese export volumes."
Weyerhaeuser shares fell 66 cents, or -3%, in premarket trading Friday.
The Bottom Line
Shares of Weyerhaeuser ( WY ) have a 2.72% dividend yield, based on last night's closing stock price of $22.07. The stock has technical support in the $20 price area. If the shares can firm up, we see overhead resistance around the $25 price level.
Weyerhaeuser Company ( WY ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars.
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