BMO Capital analyst Ketan Mamtora maintained a Hold rating on Trex Company (TREX – Research Report) yesterday and set a price target of $72.00.
Ketan Mamtora has given his Hold rating due to a combination of factors influencing Trex Company’s current and future performance. The company ended 2024 on a positive note with better-than-expected Q4 results, showing a high single-digit percentage increase in sell-through year-over-year. However, despite this improvement, the absolute numbers for Q4 remained small, and sales were still down 14.4% year-over-year, which suggests some underlying challenges.
Looking ahead, the guidance for 2025 is constructive with a mid-single-digit percentage increase in sell-through expected. The premium segment of the market is performing well, while the entry-level segment is stabilizing, though not without risks. Additionally, Trex’s focus on expanding its share in the residential railing market and the upcoming operational enhancements at the Arkansas facility are positive indicators. However, the overall market conditions and the flat expectations for the repair and remodeling market contribute to the decision to maintain a Hold rating.
Mamtora covers the Industrials sector, focusing on stocks such as Beacon Roofing Supply, Louisiana-Pacific, and Masco. According to TipRanks, Mamtora has an average return of 16.7% and a 70.41% success rate on recommended stocks.