Benchmark maintains Buy rating, $80 target on Trex stock post-earnings

On Monday, Trex Company, Inc. (NYSE:TREX), a leading manufacturer of wood-alternative decking and railing products with a market capitalization of $6.63 billion, received a reiterated Buy rating and $80.00 price target from Benchmark. The endorsement follows Trex’s strong financial performance in the fourth quarter of 2024, where the company exceeded Wall Street’s expectations for revenue, EBITDA, and earnings per share (EPS). According to InvestingPro data, eight analysts have recently revised their earnings estimates upward, with price targets ranging from $61 to $90.

Trex’s robust quarter was driven by sustained demand for its high-end product lines and a sequential increase in demand for its value products, contributing to a 5.17% year-over-year revenue growth and an EBITDA of $359.94 million. The company’s strategic distribution agreements are expected to bolster market penetration in the Western United States and Canada. Feedback from early channel checks and internal performance metrics have provided support for the company’s growth projections for the current year, which are more optimistic than analysts had anticipated. For deeper insights into Trex’s financial health and growth potential, InvestingPro subscribers can access comprehensive analysis and 12 additional ProTips.

Benchmark analysts have chosen to maintain their Buy rating and $80 price target on Trex stock, citing unchanged EPS estimates. This decision comes on the heels of the company’s announcement last week, which highlighted its financial achievements and outlook. The stock currently trades at a P/E ratio of 29.66 and near its 52-week low, with InvestingPro’s Fair Value analysis suggesting the stock may be slightly undervalued at current levels.

Trex’s financial results and growth trajectory reflect the company’s ability to navigate market conditions effectively. The company’s guidance for the upcoming year, which surpasses expectations, indicates a positive outlook for its business operations and potential for continued success in its industry.

Investors and market watchers will likely keep a close eye on Trex as it aims to expand its market reach and capitalize on the ongoing demand for its product offerings. The reaffirmed Buy rating and price target signal confidence in the company’s strategy and future performance.

In other recent news, Trex Company, Inc. reported a strong performance in its fourth quarter of 2024, with earnings per share (EPS) of $0.09, significantly exceeding the forecast of $0.04. The company also surpassed revenue expectations, achieving $168 million, which was $8.71 million above projections. Trex’s full-year net sales reached $1.2 billion, marking a 5% increase from the previous year, while net income grew by 10% to $226 million. Analysts from DA Davidson maintained a Neutral rating with a $74 price target, noting Trex’s robust profit margins and potential market outperformance due to new products. Jefferies adjusted Trex’s price target to $71 from $81, maintaining a Hold rating, while Truist Securities lowered the target to $90 from $100 but kept a Buy rating, citing strong financial results and strategic inventory management. Trex’s management remains optimistic about 2025, projecting a 5-7% revenue growth and emphasizing new product development and market share expansion, particularly in the railing segment.

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