UBS downgrades Azek on ‘optimistic’ 2023 financial expectations

UBS analyst John Lovallo downgraded Azek to Neutral from Buy with an unchanged price target of $24. The analyst believes the company’s fiscal 2023 financial expectations "could prove optimistic" given ongoing decking industry destock, moderating end market demand and the potential for price-givebacks as input costs decline. As such, Azek’s margins could disappoint in fiscal 2023, Lovallo tells investors in a research note. He sees short-term headwinds for the shares.