Trex Company (TREX – Research Report), the Industrials sector company, was revisited by a Wall Street analyst today. Analyst Philip Ng from Jefferies maintained a Hold rating on the stock and has a $71.00 price target.
Philip Ng has given his Hold rating due to a combination of factors including Trex Company’s strong performance in the fourth quarter and its optimistic guidance for 2025. Despite a notable beat in both topline and margins, with sales and EBITDA exceeding expectations, the company faces a flat remodeling and renovation market. Trex’s management is optimistic about new product opportunities and expects a more stable 2025 by managing distribution channels more conservatively.
However, while the company anticipates a 5-7% sales growth, the entry-level market remains soft, and the overall market conditions are expected to remain flat. The company’s strategy to manage inventory dynamics and align sales with demand is promising, but the modest price increase will be largely offset by rebates and incentives, leading to neutral pricing. These factors, along with elevated SG&A expenses due to investments in new product launches and marketing, contribute to the Hold rating, as the potential upside is balanced by these challenges.
According to TipRanks, Ng is a 5-star analyst with an average return of 8.8% and a 52.94% success rate. Ng covers the Consumer Cyclical sector, focusing on stocks such as International Paper Co, Ball, and Graphic Packaging.
In another report released today, BMO Capital also maintained a Hold rating on the stock with a $72.00 price target.