The 18-year-old, who came through the club's academy, has just one year remaining on his current deal.
"I have met with Max's agent and we are really no further in regards to him re-signing. I would say it is unlikely he will extend his contract," Davis told the club's official website.
"There are options available to us as a club. He is our player and there would have to be a compensation package if he was to go next summer.
"What we want first and foremost is for Max to establish himself in our first team, playing well and scoring goals to help the club. We will do what is best for us as a club and of course for him."
A host of Championship clubs are believed to be monitoring proceedings.