Trex's (TREX) survey of homeowners revealed that consumers are beginning to consider renovating instead of buying homes, with outdoor projects, including decking, a priority spending area, Truist Securities said in a note Monday.

Truist said industry structure has improved as competitors have exited and distribution has consolidated around three major players, helping margins across the category.

The firm said railing, now an estimated 20%-25% of Trex's revenue, should keep growing faster than deck boards, though it carries lower margins that improving vertical integration and volume could help lift.

Truist said Trex's long-term $2 billion sales goal will likely involve acquisitions, starting with vertical deals in railing or PVC decking supply.

Truist maintained its buy rating on the stock with a price target of $60.

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