William Blair analyst Ryan Merkel has reiterated their bullish stance on TREX stock, giving a Buy rating on April 21.
Ryan Merkel’s rating is based on the Trex Company’s solid performance amidst challenging market conditions and its strategic initiatives aimed at future growth. Despite a muted reaction expected due to second-quarter margin guidance falling below expectations, Merkel sees potential in Trex’s reiterated guidance for strong margin recovery in the latter half of 2025 and healthy demand for decking and railing products.
Moreover, Trex’s commitment to improving its entry-level Enhance decking and its strong channel positioning, supported by loyal contractors, contribute to Merkel’s positive outlook. The company’s ability to maintain a high-single-digit sell-through rate and the encouraging performance of new products further bolster confidence in Trex’s growth prospects. Merkel also notes the company’s strategic management of channel inventory and its focus on premium products as key factors supporting the Buy rating.
In another report released on April 21, Bank of America Securities also maintained a Buy rating on the stock with a $67.00 price target.