PotlatchDeltic Downgraded To Sector Perform: Examining Limited Upside Post 23% Share Price Rise

RBC Capital Markets analyst Paul C. Quinn downgraded PotlatchDeltic Corp PCH to Sector Perform from Outperform at a price target of $55.

The analyst notes that PCH's share price rose 23%, outperforming its timber REIT peers on the wood products division and leverage to lumber prices through its indexed Idaho sawlogs. The analyst sees limited upside from here.

Quinn expects share repurchase activity to increase, with lumber prices rising at the end of Q1 providing more potential cash flow to allocate to share repurchases.

The analyst notes PCH is a well-positioned company amid increasing demand for North American timberlands.

The analyst raised its 2023 adjusted EBITDA estimate by 5.6% to $236.8 million but lowered the 2024 forecast by 6.8% to $320.1 million, with higher-than-expected lumber prices boosting the near-term expectations.

Price Action: PCH shares are trading lower by 1.87% at $53.10 on the last check Wednesday.