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PotlatchDeltic Corporation (PCH)
NASDAQ:PCH
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PotlatchDeltic
(NASDAQ:PCH)70Outperform
Positive Factors
Lumber Pricing
Recent data suggests that lumber pricing should trend higher, which could lead to PCH's stock outperforming after a period of stagnation.
Real Estate Performance
Real estate EBITDA of $19.4 million was ahead of the estimated $16.8 million, with more rural acres and residential lots sold than expected.
Negative Factors
Timberlands Performance
There is a desire for better trends in Timberlands, as results were slightly below forecasts with lower guidance for the next quarter and 2025.
PotlatchDeltic (PCH) vs. S&P 500 (SPY)
Market Cap
$3.64B
Dividend Yield3.89%
Average Volume (3M)466.35K
Price to Earnings (P/E)167.7
Beta (1Y)0.84
Revenue Growth3.71%
EPS Growth-64.41%
CountryUS
Employees1,383
SectorReal Estate
Sector Strength72
IndustryREITs
Share Statistics
EPS (TTM)0.28
Shares Outstanding78,788,000
10 Day Avg. Volume489,009
30 Day Avg. Volume466,349
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.43
Price to Cash Flow (P/CF)20.10
P/FCF Ratio16.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$48.17Price Target Upside4.08% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
PotlatchDeltic Business Overview & Revenue Model
Company DescriptionPotlatchDeltic Corporation (PCH) is a leading Real Estate Investment Trust (REIT) focused on owning and managing timberland, and manufacturing wood products. The company is headquartered in Spokane, Washington, and operates primarily across the United States. PotlatchDeltic's core business sectors include timberland management, wood products manufacturing, and real estate development, offering a diverse range of products and services that cater to the forestry and real estate markets.
How the Company Makes MoneyPotlatchDeltic makes money through three main revenue streams: timberland management, wood products manufacturing, and real estate sales. In timberland management, the company generates revenue by selling timber harvested from its extensive landholdings, which are sustainably managed to ensure long-term yields. The wood products segment contributes by producing and selling lumber and plywood, primarily to the construction and housing sectors. Additionally, PotlatchDeltic engages in real estate development, capitalizing on the value of its land by selling parcels for residential, recreational, and commercial use. Key partnerships with construction companies and strategic land sales further support its earnings, while sustainable forestry practices enhance its market position and long-term profitability.
PotlatchDeltic Financial Statement Overview
Summary
PotlatchDeltic exhibits a strong balance sheet with balanced leverage and solid equity position. Revenue growth and gross margin improvements are notable, but declining net income and profitability margins are concerns. Cash flow performance is robust, with significant free cash flow growth and strong cash conversion ratios.Income Statement
The company experienced a modest revenue growth of 3.71% in TTM compared to the previous year, although this follows a decrease from 2022. The gross profit margin improved significantly in TTM to 37.62%, indicating better cost management. However, the net profit margin fell to 2.06% from 6.06% a year ago, driven by a substantial drop in net income. The EBIT and EBITDA margins also decreased, reflecting pressures on operating profitability.65
Positive
Balance Sheet
The debt-to-equity ratio stands at 0.52, suggesting a balanced leverage. Return on equity declined to 1.07% in TTM from 2.86% the previous year, reflecting reduced profitability. The equity ratio is strong at 61.63%, indicating a solid financial structure with a high proportion of equity financing.75
Positive
Cash Flow
Free cash flow grew by 94.66% in TTM, showing improved cash generation despite reduced net income. The operating cash flow to net income ratio is high at 8.62, indicating strong cash flow relative to earnings. Free cash flow to net income ratio is also robust at 3.34, suggesting efficient conversion of income into cash.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.06B | 1.02B | 1.33B | 1.34B | 1.04B | Gross Profit |
| 116.40M | 124.50M | 523.96M | 621.59M | 353.15M | EBIT |
| 33.19M | 85.75M | 449.08M | 551.52M | 223.42M | EBITDA |
| 33.19M | 207.26M | 524.95M | 615.72M | 280.63M | Net Income Common Stockholders |
| 21.88M | 62.10M | 333.90M | 423.86M | 166.83M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 151.55M | 230.12M | 343.81M | 296.15M | 252.34M | Total Assets |
| 3.31B | 3.43B | 3.55B | 2.54B | 2.38B | Total Debt |
| 1.07B | 1.03B | 1.03B | 758.26M | 757.35M | Net Debt |
| 918.10M | 803.61M | 688.87M | 462.11M | 505.01M | Total Liabilities |
| 1.27B | 1.26B | 1.29B | 1.01B | 1.08B | Stockholders Equity |
| 2.04B | 2.17B | 2.26B | 1.53B | 1.30B |
| Cash Flow | Free Cash Flow | |||
| 67.47M | 37.50M | 307.10M | 429.47M | 289.48M | Operating Cash Flow |
| 188.47M | 159.11M | 491.90M | 504.89M | 335.26M | Investing Cash Flow |
| -92.06M | -95.30M | -147.52M | -59.15M | -42.19M | Financing Cash Flow |
| -182.37M | -171.71M | -295.56M | -401.31M | -124.98M |
PotlatchDeltic Technical Analysis
Positive
46.28
Price Trends
42.59
Positive
42.16
Positive
41.57
Positive
Market Momentum
0.98
Negative
62.03
Neutral
42.31
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PCH, the sentiment is Positive. The current price of 46.28 is above the 20-day moving average (MA) of 45.09, above the 50-day MA of 42.59, and above the 200-day MA of 41.57, indicating a bullish trend. The MACD of 0.98 indicates Negative momentum. The RSI at 62.03 is Neutral, neither overbought nor oversold. The STOCH value of 42.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PCH.
PotlatchDeltic Risk Analysis
PotlatchDeltic disclosed 33 risk factors in its most recent earnings report. PotlatchDeltic reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
PotlatchDeltic Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $3.64B | 167.72 | 1.04% | 3.89% | 3.71% | -64.41% | |
67 Neutral | $4.20B | 11.24 | 19.79% | 4.24% | 19.50% | 106.12% | |
67 Neutral | $22.44B | 56.94 | 3.97% | 2.65% | -7.17% | -52.62% | |
66 Neutral | $6.51B | 15.85 | 12.80% | 1.23% | -7.84% | -17.33% | |
64 Neutral | $6.70B | 16.26 | 26.08% | 1.10% | 13.95% | 138.97% | |
64 Neutral | $3.81B | 10.48 | 17.32% | 0.83% | -1.67% | -21.20% | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% |
* Real Estate Sector Average
Performance Comparison
PCH
PotlatchDeltic
46.28
1.18
2.62%
LPX
Louisiana-Pacific
92.83
16.75
22.02%
RYN
Rayonier
27.29
-4.59
-14.40%
UFPI
UFP Industries
109.13
-4.81
-4.22%
WY
Weyerhaeuser
30.65
-3.28
-9.67%
BCC
Boise Cascade
101.62
-22.02
-17.81%
PotlatchDeltic Earnings Call Summary
Earnings Call Date: Jan 27, 2025 | % Change Since: 9.05% | Next Earnings Date: Apr 28, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong performance in Real Estate and successful strategic initiatives like the Waldo sawmill modernization. However, these positives were balanced by challenges in the Wood Products segment and market dynamics affecting lumber demand. The company's outlook is cautiously optimistic, with improvements in lumber prices and significant progress in solar energy initiatives. The sentiment is balanced by ongoing challenges in the housing market due to high interest rates and variability in timberland harvests.Highlights
Record Lumber Shipment Volume
PotlatchDeltic shipped over 1.1 billion board feet of lumber in 2024, setting a new annual shipment volume record despite downtime at the Waldo sawmill for modernization and expansion.
Strong Real Estate Performance
The Real Estate segment contributed $147 million in adjusted EBITDA for 2024, with significant land sales and a $6 million commercial land sale at $500,000 per acre.
Modernization of Waldo Sawmill
Successful modernization and expansion of the Waldo sawmill, expected to increase annual capacity by 85 million board feet, with a projected $25 million in incremental EBITDA annually.
Improvement in Lumber Prices
Lumber prices saw a notable increase, with the Random Lengths Lumber Composite spot price up $37 or 9% per thousand board feet in the fourth quarter.
Advancement in Solar Options
Solar option contracts doubled, covering over 35,000 acres with an NPV exceeding $400 million by year-end, with plans to expand further.
Lowlights
Wood Products Segment Loss
The Wood Products segment reported an adjusted EBITDA loss of $8 million for 2024, affected by weak lumber pricing during most of the year.
Soft Demand in Lumber Markets
Challenging market dynamics with cautious buyer sentiment, ample lumber supply, and soft demand in end markets exerted downward pressure on lumber markets.
Impact of Interest Rates on Housing
Elevated mortgage rates continued to depress the home-buying market and hold back construction activity, affecting demand for lumber in the housing sector.
Reduced Timberland Harvest Volume
The planned harvest volume for 2025 is modestly lower at 7.4 million tons compared to 7.6 million tons in 2024 due to land sales and normal variability.
Company Guidance
During the PotlatchDeltic Fourth Quarter 2024 Conference Call, the company provided a comprehensive overview of their financial performance and strategic outlook. The company reported an adjusted EBITDA of $232 million for 2024, with the Timberlands division contributing $139 million and the Real Estate segment generating $147 million. Despite facing challenges in the Wood Products segment, which saw an $8 million adjusted EBITDA loss for the year, the division improved to $9 million in the fourth quarter due to better lumber prices. The company harvested 7.6 million tons of timber and shipped over 1.1 billion board feet of lumber for the year. Looking ahead to 2025, PotlatchDeltic plans to harvest approximately 7.4 million tons and ship 1.2 billion board feet of lumber. The Waldo sawmill modernization is expected to increase capacity by 85 million board feet, reduce cash processing costs by 30%, and add $25 million in incremental EBITDA annually. The Real Estate segment's strong performance included the sale of 57,000 acres at $2,300 per acre and significant solar option contracts covering over 35,000 acres with an estimated net present value exceeding $400 million. The company remains cautiously optimistic about the 2025 lumber market, driven by improved supply-demand dynamics and fundamental housing market trends.PotlatchDeltic Corporate Events
Financial Disclosures
PotlatchDeltic Releases Investor Presentation Materials
Neutral
Feb 25, 2025
On February 25, 2025, PotlatchDeltic Corporation released presentation materials on its Investor Relations website, which include reconciliations of non-GAAP financial measures to GAAP measures. These materials are intended for use in presentations to investors and analysts, reflecting the company’s commitment to transparency in financial reporting.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.