Raymond James added PotlatchDeltic (NASDAQ:PCH) to their “Analyst Current Favorite” list after January housing data indicated a stronger-than-expected start to the 2023 spring selling season. Raymond James rates the lumber company’s a Strong Buy with a $57.00 price target.
Analysts there wrote in a note, “As the most lumber-levered name of the timber REITs, we believe PCH could be poised to benefit from another seasonal upswing in lumber prices as spring construction begins and inventory across the supply chain remains very lean. Numerous data points from homebuilders suggests a strong January buyer response from recent price reductions and incentives, which in turn has led to strategic operating shifts to maintain higher production levels of spec homes this spring.”
With builders increasingly willing to “build through” this period and Canadian producers accelerating capacity reductions, cash market lumber prices have bounced back 15% to ~$440/mbf. As such, the analysts believe it is increasingly likely the seasonal bottom in lumber prices has already been made.
Shares of PCH are down 0.88% in mid-day trading on Tuesday.