AZEK - Most building-products stocks downgraded at Credit Suisse on mortgage pressures

Several makers of building products were downgraded Friday by analysts at Credit Suisse as the companies grapple with lower demand for housing amid the rise in borrowing costs.

The investment bank lowered its ratings on Azek ( NYSE: AZEK ), Fortune Brands Home & Security ( NYSE: FBHS ), Hayward Holdings ( NYSE: HAYW ), Jeld-Wen Holding ( NYSE: JELD ) and Stanley Black & Decker ( NYSE: SWK ) to Neutral from Outperform.

The bank also cut Trex ( NYSE: TREX ) to Underperform from Neutral.

The sole exception to the downgrades was Carlisle Companies ( NYSE: CSL ), which Credit Suisse upgraded to Outperform from Neutral.

“We are generally lowering out EBITDA estimates to account for the impact of declining housing turnover on the assumption that rates stay elevated for the foreseeable future,” Dan Oppenheim, analyst at Credit Suisse, said in the Oct. 14 report. “The key driver of this view is that the gap between mortgages already in place and current available mortgage rates will limit existing home sales.”

U.S. mortgage rates this year have risen to their highest level in more than two decades as the Federal Reserve raises interest rates to tackle a 40-year high in inflation. The central bank is forecast to lift rates by another 75 basis points to a range of 3.75% to 4% at its next meeting in November.

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