** Brokerage Raymond James upgrades timber REITs Weyerhaeuser WY.N and Potlatchdeltic Corp PCH.O to "outperform" from "market perform" on improving lumber fundamentals and deep valuation discounts

** Shares of WY and PCH are up 0.9% and 1.7%, respectively, in premarket trading

** Brokerage says, "the longer-term thesis for the timber REITs remains particularly bright"

** Raymond James points to an under-supplied U.S. housing market, expected to grow with lower mortgage rates and strong demand for rural and HBU (higher and better use) land sales as key drivers

** The average rating of 12 brokerages for WY and eight brokerages for PCH is a "buy"

** As of Friday's close, WY has dropped ~20% YTD, while PCH has declined ~21% YTD

(Reporting by Joel Jose in Bengaluru)

((joeljose@thomsonreuters.com))