DA Davidson maintained a Neutral rating on Trex Company (NYSE:TREX) while trimming its price target from $74 to $60, citing signs of a cooling demand environment for decking projects heading into the peak season.
According to the firm’s latest contractor survey, first-quarter project activity showed a modest 2% year-over-year growth—marking a slowdown from the 3% gains seen in each of the past three quarters. Forward-looking expectations also dimmed, with near-term growth forecasts slipping slightly and full-year projections falling more notably from 9% to just 4%.
Analysts pointed to rising political and economic uncertainty as a key factor making homeowners more hesitant to greenlight outdoor renovation projects. Weaker consumer confidence is also raising concerns about demand holding up through the critical spring and summer months, which typically drive a bulk of Trex’s annual sales.
With the outlook turning more cautious, DA Davidson sees limited near-term catalysts for the stock and believes the revised price target better reflects the company’s tempered growth trajectory.