Stephens analyst Trey Grooms downgraded the rating on AZEK Company (AZEK – Research Report) to a Hold today, setting a price target of $58.00.
Trey Grooms has given his Hold rating due to a combination of factors surrounding the acquisition of AZEK by James Hardie. The transaction, valued at $8.75 billion, involves a mix of cash and stock, translating to $56.88 per share. This acquisition is expected to bring about significant cost and sales synergies, with James Hardie projecting $125 million in annualized cost savings and $500 million in potential sales synergies.
Despite the positive outlook on the synergies and the strategic fit of the acquisition, Grooms believes that a more attractive offer for AZEK shareholders is unlikely. Consequently, he has downgraded AZEK to an Equal-Weight rating from Overweight, while maintaining the current estimates and guidance provided by AZEK’s management for FY25 and F2Q25.
In another report released today, Robert W. Baird also downgraded the stock to a Hold with a $53.00 price target.
Based on the recent corporate insider activity of 78 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of AZEK in relation to earlier this year.