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James Hardie Industries PLC

JHX: XASX (AUS)

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Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$37.00	Xftx	Dlqxxbkrlm

James Hardie Earnings: Taking Share in a Challenging Market

Nov 8, 2023

We have raised our fair value estimate for James Hardie by 6% to AUD 45.50, with the shares trading at a modest premium to that. Although we think fiscal 2024 will be a soft year for U.S. housing construction, we are now more confident in James Hardie’s ability to outperform competitors in the near term. James Hardie’s strong brand, which along with cost advantages underpins our wide moat rating, is driving market share gains at a time when higher interest rates and cost inflation are putting pressure on homebuilding. Customers are responding to James Hardie’s superior value proposition, and sales are benefiting from higher exposure to more resilient construction regions such as Texas. To reflect these tailwinds, we upgraded our fiscal 2024 revenue forecast by 6% to USD 3.8 billion, broadly in line with fiscal 2023, and lifted our medium-term and midcycle revenue assumptions. We also upgraded our margin forecasts to reflect disinflation of major inputs, namely freight and pulp, which caused our fiscal 2024 adjusted net profit after tax forecast lift 10% to USD 663 million, or USD 1.50 per share.

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