$6.15
$17.16
bear $6.15
base $11.63
bull $17.16
margin of safety $7.50
market price* $18.99
Rayonier is a timberland real estate investment trust. It grows pine and Douglas-fir forests, sells the timber to sawmills and pulp mills, and sells pieces of its land for development, conservation or rural use at prices above their timber value. It also develops master-planned communities such as Wildlight near Jacksonville, Florida, and Heartwood near Savannah, Georgia. The company has changed a great deal in the last two years. It sold large blocks of timberland in Oklahoma and Washington in late 2024 for about $495 million and sold its New Zealand forest business in mid-2025. On January 30, 2026 it then merged with PotlatchDeltic, issuing about 140.9 million shares (1.8185 Rayonier shares plus $0.61 cash for each PotlatchDeltic share). The merger added large timberlands in Idaho and the South, plus lumber and plywood mills and the Chenal Valley community in Little Rock, Arkansas. Today's business is roughly half Rayonier's remaining U.S. forests and land business and half the former PotlatchDeltic, and about 300 million shares are outstanding. How we measure earnings. We start from operating cash flow. We remove working-capital swings and stock-based pay, and we subtract the spending needed to keep the forests and land business as they are: replanting, fertilizing, roads and real estate development spending. Purchases of new timberland are treated as optional growth and left out. Before the merger, Rayonier's owner earnings ran between $0.99 and $1.80 per share from 2016 to 2025 (median about $1.16), or about $1.29 to $2.06 per share before interest. Those years still included New Zealand and the forests sold in 2024. To value the business as it stands now, we removed New Zealand's cash flow and the interest income earned on sale proceeds, since that cash is counted separately below. We also lowered the earnings level for the land sold in 2024. On that basis, Rayonier's U.S. business produces about $165 million a year before interest. That is below 2025's level, because 2025 benefited from an unusually strong year of land sales (real estate adjusted EBITDA of $127 million against $92 to $99 million in the two prior years). For the former PotlatchDeltic, results swing with lumber prices. Using its filed cash flows from 2019 through 2024, plus nine months of 2025, we took the middle of a full lumber cycle. That cycle runs from the 2023 trough of about $93 million to the 2021 peak above $400 million, and its middle is about $145 million a year before interest. In that figure we counted roughly $60 million a year of mill and forest upkeep as maintenance, rather than the full spending in years when the Waldo, Arkansas sawmill was being rebuilt. We credit only $10 million a year of merger savings, for the duplicate public-company costs already removed, and subtract $5 million for the higher 2026 spending plan the company has disclosed ($104 to $108 million of capital spending plus $40 to $44 million of real estate development). Added to Rayonier's $165 million, that gives the combined company about $315 million a year, or about $1.04 per share, before interest. The company's larger synergy target is not counted because it has not yet been achieved. The most recent full year (2025) saw Rayonier's per-share cash flow before interest fall about 4%, with Southern pine pulpwood stumpage prices down 22% and sawtimber down 8%. So the base case assumes no growth in year one. Debt. At March 31, 2026 the company owed about $2.06 billion and held about $682 million of cash. Keeping $50 million for operations, net debt is about $1.42 billion. Much of the debt carries low fixed or hedged rates plus Farm Credit patronage refunds, so in the base and bull cases we value that cheap financing at about $100 million. In the bear case we assume it is refinanced at market rates. Base case: about $315 million a year with no price growth. The land base shrinks slowly as the company keeps selling rural and development land each year, so cash flow drifts down about 0.5% a year with no end date. Forests regrow on a known rotation, and Rayonier has managed these lands for decades, so the earnings power does not stop after ten years. The business is worth about $4.85 billion. After about $1.32 billion of net debt, that leaves about $3.52 billion, or roughly $11.63 per share. Bear case: Southern pulpwood stays weak as softer pulp mill demand persists. Lumber sits at its 2023 trough for a decade, so the mills earn little. Land sales fall back to their lower historical pace, and no merger savings appear. Cash flow is about $230 million a year, shrinking 1% a year. The business is worth about $3.29 billion. After $1.42 billion of net debt with no credit for cheap financing, about $1.86 billion is left, or roughly $6.15 per share. Even here, cash flow covers interest more than twice over. Bull case: Southern stumpage recovers to 2024 levels. Lumber settles at mid-cycle-plus pricing, helped by the duties on Canadian lumber already in place. About $30 million of merger savings are delivered. Cash flow is about $410 million a year, flat for ten years and then drifting down 0.5% a year. The business is worth about $6.52 billion. After $1.32 billion of net debt, about $5.20 billion is left, or roughly $17.16 per share. What has changed since our previous estimate. Our previous estimate ($9.40 / $18.90 / $29.40) applied Rayonier's pre-merger cash flow per share, which still included New Zealand and the forests sold in 2024, to the enlarged company. It also assumed earnings would grow every year forever. Now we rebuild the combined company's cash flow from both companies' filings, value the whole business before interest, subtract the roughly $1.4 billion of net debt, and credit no growth that is not already secured. Those changes lower the estimates to $6.15 / $11.63 / $17.16 per share. Discounting all future years at a lower fixed rate, and valuing the cheap existing debt, partly offsets the reduction. Things to watch. The new quarterly dividend of $0.26 a share costs about $317 million a year. That is more than our estimate of cash flow after interest (roughly $245 to $255 million), so it relies on recovery, merger savings, or ongoing land sales and borrowing. Selling land is a real source of value: by our estimate, the 2024 and 2025 sales fetched prices well above the value of the cash those acres produced. But each sale also shrinks the forest base. Merger accounting is not yet complete, and we did not have a full-year 2025 cash flow statement for PotlatchDeltic. We used its first nine months ($155.7 million of operating cash flow), so the combined starting level carries more uncertainty than usual. Margin-of-safety price. Timber and lumber prices are cyclical, the merger is new, and the company carries meaningful debt. The margin-of-safety price therefore sits about 35% below the base case, at about $7.50 per share, a little above the bear case value.