AZEK - AZEK stock gains after Citi upgrades to Buy on solid earnings prospects

AZEK (NYSE:AZEK) stock is rising 1.4% in early Friday trading after Citi analyst Anthony Pettinari upgraded the building materials supplier to Buy. Underlying earnings power should stay intact even as "softening consumer sentiment may pressure some repair & remodel activity in the spring/summer, and continued cost inflation will crimp margins temporarily," he wrote in a note to clients. "We estimate EBITDA +14% CAGR over 2022-24, "with valuation too compelling to ignore," he said. AZEK (AZEK) was recently trading at ~11x net twelve months' EBITA compared with its ~22x post-IPO trading average and ~23x five-year average for Trex (TREX). Last month, SA's Quant rating warned that AZEK (AZEK) is at high risk of performing poorly on decelerating momentum and inferior profitability. That clashes with the average Wall Street rating of Strong Buy. SA contributor The Value Investor explains why they still consider AZEK's (AZEK) valuation as elevated.

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AZEK stock gains after Citi upgrades to Buy on solid earnings prospects