- Trex (TREX), the leading composite decking manufacturer, shows strong price momentum and recently hit a new 52-week high.
- Shares are up nearly 65% over the past year.
- TREX maintains a 100% “Buy” technical opinion from Barchart.
- Future upside depends on declining mortgage and remodeling loan rates, which could benefit building products demand and support TREX’s growth outlook.
Today’s Featured Stock
Valued at $5.44 billion Trex (TREX) is the world’s largest manufacturer of high-performance wood-alternative composite decking and railing products, primarily serving the United States market. Its portfolio also includes fencing, cladding, fasteners, decorative outdoor lighting, and outdoor living accessories.
What I’m Watching
I found today’s Chart of the Day by using Barchart’s powerful screening functions to sort for stocks with the highest technical buy signals and superior current momentum. I then used Barchart’s Flipcharts feature to review the charts for consistent price appreciation. TREX checks those boxes. The Trend Seeker issued a new “Buy” signal on Oct. 19. Since that signal, TREX is up 16.09%.
Barchart’s Technical Indicators for Trex
Editor’s Note: The technical indicators below are updated live during the session every 20 minutes and can therefore change each day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report. These technical indicators form the Barchart Opinion on a particular stock.
Trex hit a 52-week high of $60.21 on Nov. 5.
- Trex has a Weighted Alpha of 69.96.
- TREX has a 100% “Buy” opinion from Barchart.
- The stock has gained 64.11% over the past 52 weeks.
- Trex has its Trend Seeker “Buy” signal intact.
- The stock recently traded at $54.42 with a 50-day moving average of $46.96.
- TREX had 12 new highs and gained 20.24% in the last month.
- 60-month beta of 1.46.
- Relative Strength Index (RSI) is at 59.85.
- There’s a technical support level around $52.98.
Don’t Forget the Fundamentals
- $5.44 billion market capitalization.
- 32.63x trailing price-earnings ratio.
- Revenue is expected to grow 10.30% this year and another 4.94% next year.
- Earnings are estimated to decrease 0.07% this year but increase again by 10.42% next year.
Analyst and Investor Sentiment on Trex
- Wall Street analysts followed by Barchart give the stock 15 “Strong Buy,” 6 “Hold” and 1 “Strong Sell” opinion with price targets from $46 to $75.
- Value Line rates the stock “Above Average” with price targets between $65 and $100.
- Morningstar thinks the stock is 14% overvalued with a fair value of $51.46.
- CFRA’s Market Scope rates the stock a “Hold” with a price target of $63.
- 10,660 investors are following the stock on Seeking Alpha, which rates it a “Hold.”
- TipRanks’ analysts have a consensus price target of $62.92.
- Short interest is 10.13% of the float with 7.03 days to cover.
The Bottom Line on Trex
The company displays strong profitability and impressive recent price momentum, but this is offset by an expensive valuation and stagnating growth. If mortgage and remodeling loan rates come down, building products companies should get the benefits.
Additional disclosure: The Barchart Chart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculative. Should you decide to add one of these stocks to your investment portfolio, it is highly suggested you follow a predetermined diversification and moving stop loss discipline that is consistent with your personal investment risk tolerance.
On the date of publication, Jim Van Meerten did not directly have a position in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.