UPDATE: Baird Downgrades Trex (TREX) to Neutral on Slower Sell-Through, Supply Constraints
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Baird analyst Timothy Wojs downgraded Trex (NYSE: TREX) from Outperform to Neutral with a price target of $108.00 (from $116.00) as checks suggest sell-through demand slower in Q3/Q4E.
The analyst commented, "Anecdotal commentary suggests a combination of material/labor constraints, tougher compares, inflation, and seasonality are all playing parts. We remain bullish on long-term industry secular drivers (material conversion, outdoor living wallet share gains) and expect sell-in to exceed sell-through in H2, as channel inventories are replenished; however, slower end-use sales could create a sentiment overhang, limiting near-term stock upside. Our long-term thesis remains intact, but tactically downgrading TREX to Neutral, reflecting YTD outperformance, relative valuation."
Shares of Trex closed at $103.04 yesterday.
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