UPDATE: Stifel Nicolaus Downgrades Trex Company to Hold on Valuation

Stifel Nicolaus reduced its rating on Trex Company

from Buy to Hold and removed its previous $31 price target. Stifel Nicolaus noted, "We would need to increase our 12-month target price to a minimum of $40 per share to justify a continued Buy rating from the current price and this would represent a valuation of 11.2X EBITDA and a P/E of 17.8X 2013 forecasted EPS of $2.25 which we think is hard to justify. We believe the stock has been riding the strong housing data in recent months, despite having less than 10% exposure to new residential construction. We are more focused on drivers of the repair/replacement market, which include existing home sales, home prices, and home prices, which are all on positive trends." Trex Company closed at $33.05 on Wednesday.