Trex: Market Perform as PVC Expansion and Soft Demand Temper Upside Despite Attractive Valuation

William Blair analyst Ryan Merkel has maintained their neutral stance on TREX stock, giving a Hold rating today.

Ryan Merkel has given his Hold rating due to a combination of factors tied to Trex’s current growth outlook and valuation. He acknowledges that Trex remains a leading brand with an attractive relative valuation, especially given its history of strong execution and the recent strategic move into PVC decking with the Refuge line. However, he also notes that demand trends are soft, growth expectations for 2026 are muted, and it is unclear whether the new PVC offering will deliver margins comparable to Trex’s legacy composite products.

At the same time, Merkel points out that Trex shares, while trading below peers on an EBITDA multiple basis, may deserve this discount because of ongoing competitive pressures—particularly from Azek in PVC—and the risk that Trex’s sell-through could continue to trail its main rival. He also highlights macro uncertainty, including limited visibility into a sustained housing and remodeling recovery, which constrains his confidence in near- to medium-term upside. Given that his price target implies only modest appreciation from current levels, he concludes that a Market Perform (Hold) rating is appropriate until there is clearer evidence of stronger demand, housing recovery, or successful scaling of the PVC initiative.

Merkel covers the Industrials sector, focusing on stocks such as Aaon, QXO Inc, and Fastenal Company. According to TipRanks, Merkel has an average return of 6.1% and a 55.03% success rate on recommended stocks.

In another report released today, TipRanks – Anthropic also reiterated a Hold rating on the stock with a $45.00 price target.