Overview
Raymond James upgraded Rayonier (NYSE: RYN) from Outperform to Strong Buy and raised its 12-month target to $28.00 from $26.00. The new target, set against a trading price of $22.49, equates to roughly a 24% upside. Analyst targets collected by InvestingPro range from $24 to $33.
Deal close and scale
The upgrade follows Rayonier’s completion of its merger with PotlatchDeltic at the end of January, a closing that came in ahead of schedule. The combined company now controls in excess of 4.1 million acres of U.S.-based timberland and, according to Raymond James, operates with a "fortress balance sheet" and roughly $300 million available for stock repurchases. InvestingPro data referenced by the broker indicates the firm carries a moderate level of debt and holds liquid assets that exceed its short-term obligations.
Beyond timberland, the transaction gives Rayonier control of PotlatchDeltic’s lumber manufacturing platform, which Raymond James characterizes as among the top 10 in the United States. The merger also brings a set of land and carbon-solution initiatives into the combined portfolio, including utility-grade solar leases, carbon capture and storage partnerships, lithium exploration projects and carbon-credit offset activities.
Market dynamics for lumber
Raymond James pointed to signs that lumber prices reached a cyclical low in early December, noting that composite cash pricing has been about 20% higher over the subsequent nine-week period. The broker also highlighted that Canadian lumber shipments into the U.S. market are tracking 25-30% lower year-over-year, and that additional capacity reductions are accumulating - factors the firm views as supportive of pricing recovery.
Despite these positive price signals, InvestingPro’s aggregate of analyst views indicates expectations for a sales decline and reduced net income for Rayonier in the current year. The apparent divergence between improving timber and lumber market signals and consensus near-term revenue and earnings expectations illustrates the mixed near-term outlook for the business.
Valuation, shareholder returns and financial position
On a pro forma basis Raymond James derives an implied land valuation of about $1,900 per acre, which it says represents roughly a 32% discount to net asset value. The stock yields about 4.8% on current distributions. InvestingPro data noted that Rayonier has paid dividends for 32 consecutive years and that management has been an active buyer of shares.
The company’s market capitalization stands at $6.84 billion. Raymond James and InvestingPro both point to cash flows sufficient to cover interest obligations as an indication of funding resilience following the merger.
Quarterly results
Rayonier reported fourth-quarter 2025 earnings that exceeded analyst expectations. The company posted earnings per share of $0.16 versus a $0.12 consensus, representing a 33.33% earnings surprise. Revenue for the quarter came in at $117.5 million compared with an estimated $109.75 million. The market reaction to the results was constructive, with investor sentiment turning positive after the announcement.
Outlook and considerations
Raymond James’ upgrade and higher target reflect the broker’s view that the merger’s strategic benefits - expanded manufacturing capability, diversified land-use ventures and a reinforced balance sheet - improve the company’s investment case. At the same time, consensus analyst expectations of lower sales and net income this year underscore ongoing near-term uncertainty.
Investors and market participants will be watching lumber pricing trends, the pace of Canadian imports, and how quickly the combined company can execute on its land and carbon-related initiatives while deploying available buyback capacity.
Conclusion
Raymond James’ move to Strong Buy and its $28 target encapsulate optimism about merger-driven scale and a recovering lumber price environment, backed by what the broker describes as a strong post-transaction balance sheet and meaningful shareholder return optionality. Offsetting those positives are analyst forecasts of weaker sales and net income for the year, keeping the near-term outlook mixed even as several fundamental indicators point to potential medium-term improvement.