Rayonier Earnings: Tepid End-Market Demand Weighs Heavily on Timber Sales

No-moat Rayonier reported disappointing second-quarter results as the company achieved sales growth and profitability below our expectations, as poor macroeconomic conditions reduced timber demand throughout the quarter. Net sales fell almost 17% year over year as all five segments reported declines in the quarter. Rayonier experienced weak demand across all timber segments as the macroeconomic environment has negatively affected timber demand, even leading to the deferral of some harvesting until the second half of the year. As such, management noted they now expect full-year adjusted EBITDA and pro forma earnings per share to be below previously stated guidance. We've decreased our fair value estimate to $34 per share from $35.