Skip to Content

James Hardie Industries PLC JHX

Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

The U.S. Needs More Homes, but Shortage Not as Bad as Some Fear; Raising Near-Term Starts Forecast

Analyst Note

| Brian Bernard, CFA, CPA |

Despite rising concerns about an affordability crisis, demand for new and existing homes continues to outpace historical averages. Strong nationwide demand for housing has outstripped supply, contributing to soaring home prices. While we agree that more homes are needed in the United States to accommodate household formations, we think some estimates of the housing shortage are too severe. For example, the National Association of Realtors and Rosen Consulting Group recently published a report that concludes that U.S. housing stock is undersupplied by at least 5.5 million units. To calculate this figure, the report compared average annual home completions during 1968-2000 (1.5 million) to the average pace of annual completions during 2001-20 (1.23 million). The difference between these two figures (0.276 million) is viewed as an annual deficit that has accumulated to a 5.5 million-unit shortage over the last 20 years. However, this approach doesn't consider that population growth has been on a downward trend since the late 1990s, nor does it account for demographic changes. Based on our calculations, which consider household formations and the historical ratio of completions to new households (1.16), we estimate the shortage is closer to 3.8 million units.

Read Full Analysis

Company Profile

Business Description

James Hardie is the world leader in fibre cement products, accounting for roughly 90% of all fibre cement building materials sold in the U.S. It has nine manufacturing plants in eight U.S. states and five across Asia-Pacific. Fibre cement competes with vinyl, wood, and engineered wood products with superior durability and moisture-, fire-, and termite-resistant qualities. The firm is a highly focused single-product company based on primary demand growth, cost-efficient production, and continual innovation of its differentiated range. With saturation of the North American market in sight, the acquisition of Fermacell in early 2018, Europe's leading fibre gypsum manufacturer, will provide Hardie with a subsequent avenue of growth.

Contact
Harcourt Street, Europa House, 2nd Floor
Dublin, D02 WR20, Ireland
T +353 14116924
Sector Basic Materials
Industry Building Materials
Most Recent Earnings Mar 31, 2021
Fiscal Year End Mar 31, 2022
Stock Type
Employees 4,861

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.