Zacks Investment Research downgraded shares of Plum Creek Timber Co. Inc. (PCL) from OUTPERFORM to NEUTRAL on November 06, 2012, with a target price of $45.00.
Plum Creek reported modest third quarter 2012 results with earnings in line with the Zacks Consensus Estimate. Plum Creek is the largest publicly-held timber REIT, with a diversified timber and land base that enables it to benefit from large economies of scale. In addition, the upsurge in demographic trends driving housing markets and demand for real estate properties across the country provides a strong economic backdrop for the company to demonstrate solid financial performance in the future. However, cyclical nature of the business, cutthroat competition, and strict environment policies undermines its long-term growth potential to some extent. We are changing our recommendation for Plum Creek from Outperform to Neutral based on downward earnings estimate revisions.
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