In a report released today, Timothy Wojs from Robert W. Baird downgraded AZEK Company (AZEK – Research Report) to a Hold, with a price target of $53.00.
Timothy Wojs has given his Hold rating due to a combination of factors surrounding the acquisition of AZEK by James Hardie. The acquisition, valued at approximately $57 per share, is structured with a mix of cash and stock, and offers a slight premium to AZEK’s historical valuation. This strategic move aligns well with James Hardie’s focus on exterior products and offers potential for conversion opportunities and channel overlap.
However, Wojs notes that the implied valuation of around 19 times the estimated 2025 EBITDA is reasonable given the current external conditions but does not present a significant premium over AZEK’s previous valuation as a public company. The deal provides AZEK shareholders with some certainty and downside protection in a volatile market, while also allowing them to benefit from the potential upside of the combined entity. Despite this, Wojs does not foresee a high likelihood of a competing offer, and the near-term stock movements are expected to be influenced by the mechanics of the deal and James Hardie’s stock price.
According to TipRanks, Wojs is a 5-star analyst with an average return of 7.6% and a 52.97% success rate. Wojs covers the Industrials sector, focusing on stocks such as Aaon, Fortune Brands Innovations, and Stanley Black & Decker.