Trex Company price target lowered to $85 from $97 at BofA

BofA analyst Rafe Jadrosich lowered the firm’s price target on Trex Company (TREX) to $85 from $97 and keeps a Buy rating on the shares after the company provided second half guidance that was well below expectations. The second half revenue view was cut for weaker sell-through and channel destocking, notes the analyst, who calls the de-stocking “painful, but prudent” and “more proactive” than 2022. The firm thinks guidance, while “very disappointing,” is achievable even if the macro gets worse and notes the channel destock is more severe than sell-out slowdown, which positions Trex for a recovery in 2025. The firm, which adds that it expects greater clarity with Azek (AZEK) earnings due after market close on August 7, expects Buy-rated Azek to see a moderation in sell-through as well, but not to the same degree as Trex given its smaller exposure to retail and more premium product offering.