Truist Securities reiterates Buy rating on Trex stock with $75 price target

Investing.com - Truist Securities has reiterated its Buy rating on Trex (NYSE:TREX) with a price target of $75.00, maintaining its positive outlook despite the stock’s year-to-date performance. Trading at a P/E ratio of 36x and showing significant volatility, Trex has caught analysts’ attention. According to InvestingPro data, the stock is currently trading near its calculated Fair Value, with analyst targets ranging from $54 to $92.

Trex shares have declined over 7% year-to-date, underperforming compared to the S&P 500’s approximate 10% gain during the same period. This underperformance has occurred despite analysts maintaining growth estimates for the company, which Truist notes is uncommon in their coverage universe outside of pricing-driven stories.

The investment firm attributes the stock’s weakness to multiple compression, which has happened while the broader sector has seen multiple expansion amid expectations for interest rate cuts. Truist believes Trex could experience a "catch up" if the company delivers expected results for the remainder of the year.

According to Truist’s analysis, this potential recovery could approach 20 times their 2026 EV/EBITDA estimate, representing a possible 20% upside from current levels. The firm highlighted this as part of their rationale for maintaining the Buy rating.

Truist also noted that Trex has smoothed its production, creating less year-over-year variance, which they believe will lead to more consistent financial results in 2025 and beyond.

In other recent news, Trex Company Inc reported its second-quarter 2025 earnings, surpassing analyst expectations. The company achieved an earnings per share (EPS) of $0.73, compared to the forecasted $0.71, and reported revenue of $388 million, exceeding the anticipated $377.57 million. DA Davidson responded to these results by raising its price target for Trex to $65 from $60, citing increased confidence in the company’s ability to achieve its full-year sales growth targets. The firm also highlighted expanding gross margins and stronger cash generation as positive factors. Benchmark maintained its Buy rating on Trex, with a price target of $80, following the company’s earnings report. Despite challenging weather conditions and a softening repair and remodel market, Trex’s quarterly results slightly exceeded consensus expectations across revenue, EBITDA, and EPS metrics. These developments reflect the company’s resilience and potential for continued growth.

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