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James Hardie Industries (JHX)
:JHX
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James Hardie
(NYSE:JHX)
Rating:72Outperform
Price Target:
$30.00
▲(14.20%Upside)
Positive Factors
Acquisition and Synergies
The acquisition combines two secular growth stories with significant synergies from cost and sales given overlapping contractors.
US Stock Listing
An upgrade from a US ADR to a full US listing could significantly increase JHX's trading multiple, as seen in similar moves by other companies.
Negative Factors
Cash Flow Allocation
A portion of the company's cash flow is allocated to fund an Australia Asbestos Trust, which requires annual payments.
Market Reaction
JHX was -10% in Australia on the news as investors there might not understand the composite decking opportunity.
James Hardie (JHX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$11.23B
Dividend YieldN/A
Average Volume (3M)4.14M
Price to Earnings (P/E)26.9
Beta (1Y)1.44
Revenue Growth-1.59%
EPS Growth-15.58%
CountryUS
Employees5,679
SectorBasic Materials
Sector Strength66
IndustryConstruction Materials
Share Statistics
EPS (TTM)0.36
Shares Outstanding429,858,500
10 Day Avg. Volume6,579,448
30 Day Avg. Volume4,141,628
Financial Highlights & Ratios
PEG Ratio0.44
Price to Book (P/B)5.92
Price to Sales (P/S)0.00
P/FCF Ratio-305.12
Enterprise Value/Market Cap0.63
Enterprise Value/Revenue0.45
Enterprise Value/Gross Profit4.70
Enterprise Value/Ebitda1.93
Forecast
1Y Price Target
$28.00Price Target Upside6.59% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
James Hardie Business Overview & Revenue Model
Company DescriptionJames Hardie Industries plc (JHX) is a global leader in the production of high-performance fiber cement and fiber gypsum building solutions. With a strong presence in the United States, Australia, New Zealand, and the Philippines, the company specializes in manufacturing durable and versatile building materials used primarily in exterior home siding and interior applications. James Hardie is renowned for its innovative products that offer resistance to fire, termites, and moisture, catering to both residential and commercial construction markets.
How the Company Makes MoneyJames Hardie makes money primarily through the manufacturing and sale of fiber cement and fiber gypsum products. The company's revenue model is centered around its portfolio of building materials, which includes products like HardiePlank siding, HardiePanel vertical siding, and HardieBacker cement board. These products are distributed through a network of distributors and retailers, reaching builders, contractors, and homeowners. A significant portion of the company's revenue comes from the residential construction sector, particularly in the United States, which is its largest market. Additionally, James Hardie benefits from strategic partnerships with builders and developers, leveraging its brand reputation and product innovation to maintain a competitive edge. The company's focus on sustainability and product performance also plays a crucial role in driving demand and, consequently, revenue.
James Hardie Earnings Call Summary
Earnings Call Date:May 20, 2025
(Q4-2025)
| % Change Since: 6.23%|
Next Earnings Date:Aug 18, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong performance in North America, strategic growth initiatives including the AZEK partnership, and successful product innovations. However, challenging market conditions, volume declines, and raw material cost pressures presented significant obstacles. The guidance for FY '26 remains cautiously optimistic, indicating resilience despite headwinds.Q4-2025 Updates
Positive Updates
Solid North America Performance
Delivered 2.95 billion standard feet of volume in North America, with a North America EBIT margin of 29.4%, generating $2.9 billion in sales and $1 billion of EBITDA in FY '25.
Strategic Partnership with AZEK
Announced a combination with The AZEK Company to create a leading growth platform in building products, aiming for $500 million in revenue synergies and $125 million in cost synergies.
Successful Product Innovations
Innovative product solutions like ColorPlus saw double-digit growth in FY '25, with new products like TimberHue, Artisan Lab, and Statement Essentials enhancing market offerings.
Strong Financial Results
Achieved adjusted EBITDA of $269 million in Q4 and delivered a full-year adjusted EBITDA margin of 35% in North America.
Positive Outlook and Guidance
Guided for low single-digit net sales growth in North America in FY '26, with continued margin stability and expected free cash flow growth over 30% to at least $500 million.
Negative Updates
Challenging Market Conditions
Faced a more challenging macro environment with ongoing demand challenges, particularly in multifamily and interior product segments.
Decline in North American Volumes
Experienced a 3% decline in North American volumes in Q4, including a low-double-digit decline in interior products.
Raw Material Cost Pressures
Continued to face raw material headwinds, particularly in cement and pulp, affecting margins.
Softer European Market
European markets remained challenged, with a gradual path to recovery anticipated, especially in Germany.
Impact of Philippines Closure
Asia Pacific segment faced a 17% decline in net sales due to the closure of Philippines operations.
Company Guidance
During the James Hardie Fiscal Fourth Quarter 2025 Earnings Conference Call, the company provided guidance for fiscal year 2026, assuming continued macroeconomic headwinds. In North America, the company prudently plans for a mid-single-digit decline in market volumes but expects low single-digit net sales growth, driven by the strength of the James Hardie brand and its value proposition. This includes the continuation of double-digit volume growth from single-family ColorPlus products. The company anticipates maintaining a stable EBITDA margin of approximately 35% for North America, despite high single-digit raw material inflation. James Hardie aims for consolidated adjusted EBITDA growth by low single digits and free cash flow of at least $500 million, an increase of over 30% compared to fiscal year 2025. This outlook is supported by strong cash flow generation, effective working capital management, and reduced capital expenditures, highlighting the company's strategic investment in growth and market outperformance.James Hardie Financial Statement Overview
Summary
James Hardie shows strong financial performance with solid profitability and efficient use of equity. Despite a slight revenue decline, the company maintains good operational margins and strong cash flow conversion. The balanced approach to leverage supports long-term stability.Income Statement
James Hardie demonstrates solid profitability with a strong gross profit margin of 38.8% and a respectable net profit margin of 10.9% for 2025. However, revenue growth has been slightly negative at -1.5% from the previous year, indicating a slight decline in top-line growth. The EBIT margin of 16.9% and EBITDA margin of 23.3% suggest effective cost control and operational efficiency.78
Positive
Balance Sheet
The balance sheet shows a stable financial position with a debt-to-equity ratio of 0.56, reflecting moderate leverage. The return on equity (ROE) is strong at 19.6%, suggesting effective use of shareholders’ equity to generate profits. The equity ratio stands at 41.3%, indicating a healthy proportion of equity financing.75
Positive
Cash Flow
Operating cash flow is robust, covering net income well with a ratio of 1.89. Free cash flow has decreased by -18.1% from the previous year, but remains positive, ensuring some flexibility. The free cash flow to net income ratio of 0.90 indicates sound cash conversion from operations.70
Positive
| Breakdown | ||||
| Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.88B | 3.94B | 3.78B | 3.61B | 2.91B | Gross Profit |
| 1.50B | 1.59B | 1.31B | 1.31B | 1.05B | EBIT |
| 655.90M | 767.40M | 741.40M | 682.60M | 472.80M | EBITDA |
| 902.60M | 976.07M | 934.24M | 844.20M | 594.80M | Net Income Common Stockholders |
| 424.00M | 510.20M | 512.00M | 459.10M | 262.80M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 562.70M | 365.00M | 113.00M | 125.00M | 208.50M | Total Assets |
| 5.23B | 4.91B | 4.48B | 4.24B | 4.09B | Total Debt |
| 1.21B | 1.20B | 1.14B | 955.50M | 922.60M | Net Debt |
| 642.30M | 836.00M | 1.03B | 830.50M | 714.10M | Total Liabilities |
| 3.07B | 3.05B | 2.87B | 2.91B | 3.03B | Stockholders Equity |
| 2.16B | 1.86B | 1.61B | 1.33B | 1.06B |
| Cash Flow | Free Cash Flow | |||
| 380.60M | 464.90M | 7.80M | 497.50M | 666.70M | Operating Cash Flow |
| 802.80M | 914.20M | 607.60M | 757.20M | 786.90M | Investing Cash Flow |
| -446.70M | -470.50M | -660.10M | -348.20M | -120.40M | Financing Cash Flow |
| -165.90M | -210.10M | -25.40M | -449.60M | -540.20M |
James Hardie Technical Analysis
Neutral
26.27
Price Trends
23.94
Positive
27.48
Negative
31.20
Negative
Market Momentum
0.70
Negative
57.00
Neutral
79.91
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JHX, the sentiment is Neutral. The current price of 26.27 is above the 20-day moving average (MA) of 24.96, above the 50-day MA of 23.94, and below the 200-day MA of 31.20, indicating a neutral trend. The MACD of 0.70 indicates Negative momentum. The RSI at 57.00 is Neutral, neither overbought nor oversold. The STOCH value of 79.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JHX.
James Hardie Risk Analysis
James Hardie disclosed 1 risk factors in its most recent earnings report. James Hardie reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
James Hardie Peers Comparison
Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $34.45B | 36.97 | 12.10% | 0.75% | -2.24% | 3.00% | |
77 Outperform | £60.87B | 19.05 | 15.72% | 1.64% | 2.11% | 3.37% | |
76 Outperform | $6.41B | 14.23 | 33.52% | 0.51% | 0.05% | 0.96% | |
75 Outperform | $32.70B | 31.19 | 11.88% | 0.58% | -0.54% | -48.61% | |
72 Outperform | $10.27B | 7.02 | 6.58% | 1.22% | -8.41% | 570.14% | |
72 Outperform | $11.23B | 26.89 | 21.05% | ― | -1.59% | -15.58% | |
51 Neutral | $2.03B | -1.27 | -21.09% | 3.98% | 2.91% | -30.50% |
* Basic Materials Sector Average
Performance Comparison
JHX
James Hardie
26.27
-5.73
-17.91%
CX
Cemex SAB
6.77
0.34
5.29%
EXP
Eagle Materials
195.95
-33.37
-14.55%
MLM
Martin Marietta Materials
542.47
-28.07
-4.92%
VMC
Vulcan Materials
260.77
6.37
2.50%
CRH
CRH plc
90.04
12.51
16.14%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.