Plum Creek Timber (PCL) Stock Upgraded at RBC Capital Markets
NEW YORK (TheStreet) -- Plum Creek Timber (PCL) stock was upgraded to "outperform" from "sector perform" at RBC Capital Markets on Tuesday.
The Seattle-based timberland owner was upgraded after it announced last week that it would merge with Weyerhaeuser (WY), a real estate investment trust and timber owner, RBC said.
"Not only does the combination expand the company's overall timberland portfolio, but we believe it also improves Plum Creek Timber's asset quality," the firm added.
The firm set a $56 price target on Plum Creek Timber stock.
Shares of Plum Creek are up by 2.31% to $48.21 in mid-morning trading on Tuesday.
Separately, TheStreet Ratings team rates PLUM CREEK TIMBER CO INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
We rate PLUM CREEK TIMBER CO INC (PCL) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, solid stock price performance, compelling growth in net income and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- PCL's revenue growth has slightly outpaced the industry average of 6.1%. Since the same quarter one year prior, revenues rose by 10.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, PLUM CREEK TIMBER CO INC's return on equity exceeds that of both the industry average and the S&P 500.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 63.9% when compared to the same quarter one year prior, rising from $61.00 million to $100.00 million.
- Net operating cash flow has increased to $195.00 million or 46.61% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 6.55%.
- You can view the full analysis from the report here: PCL
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.