Wedbush Cuts Price Target on Trex (TREX) Following 2Q Results

Wedbush maintained a Neutral rating on Trex (NYSE: TREX), and cut the price target to $45.00 (from $53.00), following 2Q results. revenue of $136.8 million was relevively in-line with consensus estimates. Adjusted EPS of $0.60 was in-line with consensus as well. Management guides Q3 revenue to $96 million or flat y/y.

Analyst Al Kaschalk commented, "We are maintaining our NEUTRAL rating following an in-line 2Q while 3Q guidance suggests decelerating growth top-line rate. TREX posted 13% topline growth y/y led by an 8% increase in volume yet mix drove 48.3% incremental gross margin or 190bps shortfall versus our estimate. Ex-certain charges, Adjusted EPS was a $0.01 ahead of our estimate. In terms of its outlook statement, decking end market demand is returning to a more normal seasonal demand trend and management now expects 3Q revenue flat versus the $96 million reported in the year ago period. Heading into the seasonally weakest periods, we are maintaining our NEUTRAL rating as we believe there is limited opportunity for TREX to meaningfully exceed expectations and related earnings estimates."

For an analyst ratings summary and ratings history on Trex click here. For more ratings news on Trex click here.

Shares of Trex closed at $38.84 yesterday.

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