Loop Capital downgrades Trex to Hold on slowing demand

Loop Capital downgraded Trex Company to Hold from Buy with a price target of $75, down from $95, post the Q2 report. The analyst cites a more conservative sell through demand outlook for the downgrade. While the company reported a modest Q2 beat and decelerating bidding environment as anticipated, the pace of expected sell through demand declines in the second half of 2024 were more significant than expected, the analyst tells investors in a research note. The firm continues to like Trex’s attractive long-term demand fundamentals driven by continued share gains against wood, but moved to the sidelines due to a lack of near to mid-term catalysts until there is improved 2025 demand and margin visibility.