Truist Securities reiterates Buy rating on Trex stock amid market concerns

Investing.com - Truist Securities has reiterated its Buy rating and $75.00 price target on Trex (NYSE:TREX) following a significant intraday drop in the company’s stock price on Thursday. According to InvestingPro data, the stock currently trades at a P/E ratio of 31x, with analysts’ targets ranging from $54 to $92.

The decking manufacturer’s shares fell over 7% at points during the trading session while the S&P remained flat, reportedly in response to a competitor’s note raising concerns about potential price discounting and higher SG&A spending at Trex.

Truist Securities disputed these concerns, stating they have "seen no sign of discounting" and noting that prices are actually "rising somewhat." The firm also pointed to new AZEK owner James Hardie (NYSE:JHX), which has a history of implementing price increases.

The research firm expressed confidence that any future increases in SG&A spending would be growth-dependent, adding that Trex would likely grow EBITDA next year "even with a flattish R&R market."

Truist Securities suggested market sentiment on Trex has become overly negative, with "every negative talking point" being believed, and recommended investors buy the stock on weakness.

In other recent news, Trex Company reported its second-quarter 2025 earnings, surpassing analyst expectations with an earnings per share (EPS) of $0.73, compared to the forecasted $0.71. The company also reported revenue of $388 million, exceeding the anticipated $377.57 million. Benchmark reiterated its Buy rating on Trex stock and maintained an $80 price target following the earnings report. Similarly, Truist Securities reiterated its Buy rating with a price target of $75, maintaining a positive outlook despite the stock’s year-to-date decline. DA Davidson raised its price target on Trex to $65 from $60, citing resilient sales and increased confidence in the company’s ability to achieve full-year sales growth targets. The firm also highlighted expanding gross margins and stronger cash generation as reasons for the adjustment. These developments reflect a mix of analyst confidence and positive financial performance for Trex in recent months.

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