Jefferies this week increased its price target on Trex Company Inc. to $52.00 from $51.00 while maintaining a Buy rating on the composite decking manufacturer. At the time of the update the shares were trading at $41.45, implying potential upside to the analyst's revised target.
The firm pointed to a solid fourth-quarter performance as the main rationale for the adjustment. Trex reported quarterly results that beat expectations on both top-line and margin measures, and Jefferies said the company’s 2026 guidance now appears achievable based on that showing.
Margins were a notable element of Jefferies’ assessment. Trex has sustained a gross profit margin of 39.5% over the last twelve months, a level the analyst described as stronger than previously expected. That durability in margins, combined with the recent quarter’s results, prompted Jefferies to say it now holds greater conviction after an earlier upgrade of the stock.
Company management also adopted a more positive tone, the analyst noted. Jefferies attributed some of the recent momentum to investments in selling, general and administrative activities and to rebate programs. Those initiatives, the firm said, contributed to an operational lift that showed up in the quarter's results.
The market reaction to the company's trajectory has been uneven. Trex shares rebounded roughly 18% year-to-date after falling about 35% in the prior six months, a pattern Jefferies highlighted when explaining the rationale for the target increase. The analyst framed the higher price target as reflecting an improved view of Trex's near-term prospects.
Trex's fourth-quarter results exceeded analyst forecasts. The company posted adjusted earnings per share of $0.04, beating the consensus estimate for a loss of $0.01 per share. Quarterly revenue came in at $161 million, above the anticipated $144.49 million, though that figure represented a 4% decline versus $168 million in the same quarter a year earlier.
Jefferies and the company attributed the revenue outperformance to stronger-than-expected railing sales and slightly better decking shipments in December. The earnings release also included an announcement of a leadership succession plan, a development that coincided with a roughly 4% jump in Trex shares in after-hours trading.
Contextual note: The analyst commentary frames the price-target increase around measurable improvements in margin performance and recent revenue beats, while also pointing to management tone and specific commercial initiatives as supporting factors.