Commenting on forest and paper products, UBS (NYSE:UBS) said they see companies in the paper/board business increasing earnings substantially, while the see wood products companies like Potlatch (NYSE:PCH), Louisiana-Pacific (NYSE:LPX) and Weyerhaeuser (NYSE:WY) missing.
UBS said, "Overall we expect a strong earnings pickup (y/y & q/q) for US paper/board firms we cover but a steep sequential decline for wood products cos. We expect solidly above consensus EPS from IP. While we expect much improved (in some cases record) paper/board EPS, we believe consensus estimates may be optimistic for several firms including Temple-Inland (NYSE:TIN) and Meadwestvaco (NYSE:MWV). In wood we expect Potlatch, Louisiana-Pacific and Weyerhaeuser to miss. WY/MWV results will be complicated by special div/media respectively."
Long term, forest products will probably start to pick up as news of the damage from the Mountain Pine Beetle infestation in North America hasn't been widely reported in the media.
The damage has already been done, so it's a matter of it affecting the market significantly, which will then generate the media coverage.
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