DA Davidson remains on sidelines after Azek’s Q3 results, maintains Neutral

DA Davidson maintains a Neutral rating and $44 price target on Azek following the company’s better than expected Q3 performance, telling investors this reflects a $35M shift in sales, taking some air out of Q4 expectations. The firm says the slight raise to the midpoint of full-year guidance reflects modestly better demand than previously contemplated in guidance. While execution is encouraging and margin trends remain impressive, the firm remains on the sidelines due to moderating Residential sell-through growth and risks around channel inventory reductions.