Trex Company: Strong Market Position and Growth Prospects Balanced by High Valuation

J.P. Morgan analyst Michael Rehaut has reiterated their neutral stance on TREX stock, giving a Hold rating on May 12.

Michael Rehaut has given his Hold rating due to a combination of factors. The Trex Company is seen as having a strong position in the composite decking and rail industry, with leadership and above-average margins that are expected to continue gaining market share over traditional wood products. However, despite these positive aspects, the valuation of Trex’s stock is considered somewhat high, trading at approximately 18 times the estimated 2025 EBITDA, which only offers a modest discount compared to its peer, AZEK.
Rehaut’s price target for December 2025 remains at $73, based on a blend of target multiples against forward estimates and a discounted cash flow approach. The company’s 2025 guidance was reiterated, with revenue expected to grow by 5-7% and adjusted EBITDA margins projected to be at least 31%. While the company benefits from new products and expanded distributor partnerships, the stock’s current valuation limits the potential for a more favorable rating.

According to TipRanks, Rehaut is a 4-star analyst with an average return of 6.0% and a 55.43% success rate. Rehaut covers the Consumer Cyclical sector, focusing on stocks such as LGI Homes, Installed Building Products, and DR Horton.

In another report released on May 12, D.A. Davidson also reiterated a Hold rating on the stock with a $60.00 price target.