Trex (NYSE: TREX) shares climbed more than 2% intraday on Monday after DA Davidson upgraded the stock to Buy from Neutral and raised its price target to $50 from $45.
The firm said it viewed concerns surrounding pricing pressure, competitive dynamics, and market share losses as overly discounted in the current valuation. DA Davidson stated that Trex had been taking appropriate strategic actions to defend and strengthen its leadership position in the composite decking category.
The analyst noted that favorable long-term trends in material conversion toward composite decking could support above-market revenue growth while preserving what it described as still-attractive margins. Despite the recent rally, the stock was trading at approximately 12x to 14x forward EBITDA and remained down about 37% on a last-twelve-months basis, which DA Davidson said continued to represent an appealing entry point.
The updated price target was based on a valuation range of roughly 15x to 17x projected 2026–2027 EBITDA.
