President Donald Trump has recently ordered a new investigation into U.S. lumber imports, which might lead to higher tariffs on lumber from Canada and other countries. This move is part of Trump’s ongoing effort to protect U.S. industries, especially the timber sector, and to reduce dependence on imports. The investigation will focus on national security concerns since the U.S. military uses a lot of lumber for construction, and relying too much on foreign lumber could threaten the country’s self-sufficiency.
Trump’s decision could significantly affect U.S. lumber companies. Depending on the outcome, they could either see a boost in domestic lumber production or face higher costs from imported goods.
How Do Lumber Companies Perform According to Tipranks’ Smart Score?
In light of these possible tariff changes, let’s look at the performance of some key U.S. lumber companies; we see different outlooks based on Tipranks’ Smart Scores. Companies with high Smart Scores are seen as Strong Buys with high growth potential, while those with lower scores face some fundamental challenges.
Weyerhaeuser (WY), a manufacturer and distributor of forest products, has a Smart Score of 9 and is one of the top performers in the sector. Analysts have rated it a Strong Buy, with a target price of $35.43, offering an upside of 17.71%. The company has seen increased interest from hedge funds, with 296,400 shares bought in the last quarter. This suggests investors are optimistic about Weyerhaeuser’s growth prospects, even with potential tariff changes. Analysts’ positive momentum and bullish sentiment indicate that the company is well-positioned to benefit from any boost to domestic lumber supply that could result from Trump’s tariffs.
Another promising company is International Paper Co (IP), which has a perfect Smart Score of 10. This manufacturer of paper and packaging products possesses a Moderate Buy rating, with an average price target of $60.97, offering an 8.20% upside. The sentiment among bloggers is bullish, with 100% positive sentiment compared to the sector average of 65%. Hedge funds have increased their holdings by 1.8 million shares in the last quarter, and crowd wisdom is very positive, showing a 43.9% increase over the last 30 days. The technicals are also positive, with a strong momentum of 69.01% over the past 12 months. These factors suggest that International Paper is well-positioned to outperform in the market.
On the other hand, Rayonier (RYN), with a much lower Smart Score of 2, is considered an underperformer in the sector. Analysts have a Hold rating on the stock, and its price target offers only a slight upside of 3.81%. With decreased hedge fund interest and a negative technical outlook, Rayonier may struggle to capitalize on changes in the lumber market. Companies like Rayonier, which have weaker Smart Scores, could face challenges if higher tariffs increase costs or create market uncertainty.
