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Investing.com - Loop Capital has raised its price target on Trex (NYSE:TREX) to $66.00 from $62.00 while maintaining a Hold rating on the composite decking manufacturer. According to InvestingPro data, the stock currently trades at a P/E ratio of 32.6x and has shown significant volatility, with a beta of 1.5.
The firm’s decision follows survey results showing resilient sell-through demand trends for Trex products, despite some mixed leading demand indicators and a sequential decline in calendar year 2025 sales expectations.
Loop Capital cited several positive factors for Trex, including easier second-half 2025 comparisons due to last year’s channel de-stocking, expected sequential margin improvements in the third quarter as cost headwinds diminish, and potential market share gains from industry consolidation.
The research firm also noted Trex is trading at a valuation discount to AZEK’s acquisition multiple despite its market-leading position in composite decking, though analysts remain cautious due to reduced demand visibility and a choppy bidding environment.
Loop Capital attributes the more conservative industry outlook partly to softening consumer sentiment stemming from uncertainty around the Trump Administration’s tariff policy, with the new $66 price target based on 18x the firm’s fiscal year 2026 EBITDA estimate.
In other recent news, Trex Company has reaffirmed its revenue and margin guidance for 2025, projecting mid-single-digit revenue growth and an adjusted EBITDA margin exceeding 31%. This announcement comes amid the departure of CFO Brenda Lovcik, who will remain with the company until August, with CEO Bryan Fairbanks stepping in as interim CFO. Trex also confirmed its second-quarter 2025 revenue guidance of $370 million to $380 million. Analyst firms have weighed in on these developments, with Baird upgrading Trex’s stock rating to Outperform due to stable trends and a positive outlook for 2025 earnings. Truist Securities and Benchmark have both maintained their Buy ratings, citing Trex’s ability to deliver growth despite challenging market conditions. Benchmark analysts specifically noted Trex’s strong first-quarter results and strategic positioning in the professional channel. Meanwhile, DA Davidson has kept a Neutral rating, reflecting a cautious perspective on potential economic impacts on consumer confidence. These recent developments highlight Trex’s stable financial health and market position amidst leadership changes.
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