NEW YORK (TheStreet) -- Shares of Rayonier Inc (RYN - Get Report) are sinking, down 6.42% to $26.97 in early market trading today, as the Jacksonville, FL-based company was downgraded to "sector perform" from "outperform" by analysts at RBC Capital Markets this morning.
Analysts at the firm kept its $24 price target on shares.
Yesterday, law firm Glancy Binkow & Goldberg LLP launched an investigation on Rayonier on behalf of investors concerning possible violations of federal securities laws.
The investigation is focused on its operations and financial performance, after the company announced Monday morning that it would realign its strategy and restate results for the first half of this year following an internal review of its operations, the Wall Street Journal reported.
Rayonier is a real estate investment trust, and engages in the sale and development of real estate and timberland management, as well as the production and sale of cellulose fibers in the U.S., New Zealand and Australia.
Separately, TheStreet Ratings team rates RAYONIER INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate RAYONIER INC (RYN) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 13.7%. Since the same quarter one year prior, revenues slightly increased by 5.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- 42.93% is the gross profit margin for RAYONIER INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, RYN's net profit margin of 11.26% significantly trails the industry average.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, RAYONIER INC's return on equity is below that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $127.12 million or 12.93% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, RAYONIER INC has marginally lower results.
- You can view the full analysis from the report here: RYN Ratings Report