James Hardie (JHX) AI Stock Analysis

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James Hardie

(NYSE:JHX)

68Neutral

James Hardie exhibits strong financial performance and positive earnings call insights, particularly in North America. However, the stock faces technical weaknesses and lacks a dividend yield, dampening its overall attractiveness. Strategic initiatives and growth in high-value products provide a positive outlook, but existing market challenges and lack of dividend may limit stock performance in the short term.

Positive Factors

Financial Performance

The combination will result in a company with $5.5 billion in revenue and over $1.5 billion EBITDA, boasting 28% EBITDA margins.

Market Growth

James Hardie Industries is expected to see long-term growth in fiber cement siding with a healthy mix of price and volume increases.

Stock Liquidity

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

A portion of the company's cash flow is allocated to fund an Australia Asbestos Trust, which requires annual payments.

Investor Sentiment

JHX was -10% in Australia on the news as investors there might not understand the composite decking opportunity.

James Hardie (JHX) vs. S&P 500 (SPY)

Market Cap

$9.75B

Dividend YieldN/A

Average Volume (3M)2.63M

Price to Earnings (P/E)22.4

Beta (1Y)1.48

Revenue Growth1.26%

EPS Growth-17.38%

CountryUS

Employees5,679

SectorBasic Materials

Sector Strength60

IndustryConstruction Materials

Share Statistics

EPS (TTM)1.00

Shares Outstanding429,856,480

10 Day Avg. Volume4,733,172

30 Day Avg. Volume2,632,407

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)3.23

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$27.45

Price Target Upside21.73% Upside

Rating ConsensusHold

Number of Analyst Covering3

James Hardie Business Overview & Revenue Model

Company DescriptionJames Hardie Industries plc (JHX) is a global leader in the manufacturing of fiber cement products, primarily used in exterior and interior building construction. Headquartered in Ireland, the company operates in various international markets, including North America, Europe, and Asia-Pacific. James Hardie's core products include a wide range of durable, low-maintenance, and aesthetically pleasing fiber cement siding and backer board solutions, designed for residential and commercial applications.

How the Company Makes MoneyJames Hardie makes money through the sale of its fiber cement products, which are manufactured and distributed to builders, architects, and homeowners across the globe. The company's revenue model is heavily reliant on the construction and remodeling sectors, where its products are favored for their durability, versatility, and aesthetic appeal. Key revenue streams include the sale of exterior siding products, which are often chosen for new home constructions and renovations, and interior products like backer boards used in wet areas such as bathrooms and kitchens. James Hardie has strategically positioned itself through extensive distribution networks and partnerships with major building materials distributors and retailers, ensuring its products are widely available and accessible in its target markets. Additionally, the company invests in research and development to innovate and enhance its product offerings, maintaining a competitive edge in the building materials industry.

James Hardie Financial Statement Overview

Summary

James Hardie shows strong financial health with consistent revenue growth, solid profit margins, and effective cost management. The company's leverage is prudent, and cash flow metrics indicate robust cash generation.

Income Statement

Positive

James Hardie demonstrates strong financial performance with consistent revenue growth and robust profit margins. The Gross Profit Margin for the TTM stands at 39.43%, and the Net Profit Margin is 11.15%. Revenue has increased steadily from 2020 to 2024, indicating effective market capture and operational efficiency. Notably, the EBIT and EBITDA margins remain strong at 17.33% and 23.11% respectively, showcasing the company's ability to manage costs and generate profit.

Balance Sheet

Positive

The company maintains a solid financial position with a manageable Debt-to-Equity Ratio of 0.57, indicating prudent use of leverage. Return on Equity for the TTM is 20.76%, reflecting effective management of shareholders' equity to generate profits. The Equity Ratio of 42.81% suggests a stable financing structure, although there's room for improving the equity base to enhance financial stability.

Cash Flow

Positive

James Hardie exhibits a healthy cash flow profile with a positive Free Cash Flow growth rate. The Operating Cash Flow to Net Income Ratio of 1.87 indicates strong cash generation relative to accounting profits. Additionally, the Free Cash Flow to Net Income Ratio stands at 0.83, reflecting efficient capital expenditure management. These metrics highlight the company's ability to generate cash and fund operations without relying heavily on external financing.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
3.91B	3.94B	3.78B	3.61B	2.91B	2.61B
	Gross Profit
1.54B	1.59B	1.31B	1.31B	1.05B	933.70M
	EBIT
677.80M	767.40M	741.40M	682.60M	472.80M	488.10M
	EBITDA
903.93M	976.07M	934.24M	844.20M	594.80M	473.69M
	Net Income Common Stockholders
436.00M	510.20M	512.00M	459.10M	262.80M	241.50M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
32.50M	365.00M	113.00M	125.00M	208.50M	207.40M
	Total Assets
2.18B	4.91B	4.48B	4.24B	4.09B	4.03B
	Total Debt
154.00M	1.20B	1.14B	955.50M	922.60M	1.41B
	Net Debt
134.80M	836.00M	1.03B	830.50M	714.10M	1.27B
	Total Liabilities
2.30B	3.05B	2.87B	2.91B	3.03B	2.99B
	Stockholders Equity
-117.90M	1.86B	1.61B	1.33B	1.06B	1.04B
Cash Flow		Free Cash Flow
361.75M	464.90M	7.80M	497.50M	666.70M	247.90M
	Operating Cash Flow
815.73M	914.20M	607.60M	757.20M	786.90M	451.20M
	Investing Cash Flow
-467.27M	-470.50M	-660.10M	-348.20M	-120.40M	-203.80M
	Financing Cash Flow
-240.83M	-210.10M	-25.40M	-449.60M	-540.20M	-179.00M

James Hardie Technical Analysis

Technical Analysis Sentiment

Negative

Last Price22.55

Price Trends

50DMA

29.29

Negative

100DMA

31.53

Negative

200DMA

33.21

Negative

Market Momentum

MACD

-2.31

Positive

RSI

23.32

Positive

STOCH

6.07

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JHX, the sentiment is Negative. The current price of 22.55 is below the 20-day moving average (MA) of 24.87, below the 50-day MA of 29.29, and below the 200-day MA of 33.21, indicating a bearish trend. The MACD of -2.31 indicates Positive momentum. The RSI at 23.32 is Positive, neither overbought nor oversold. The STOCH value of 6.07 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JHX.

James Hardie Peers Comparison

Overall Rating

UnderperformOutperform

Sector (47)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRH	75 Outperform	£56.43B	16.60	16.07%	1.72%	1.78%	15.53%
EXP	72 Outperform	$7.21B	15.47	33.51%	0.46%	0.64%	-1.15%
VMC	72 Outperform	$31.12B	34.39	11.79%	0.79%	-4.68%	-1.73%
JHX	68 Neutral	$9.75B	22.44	21.77%	―	1.26%	-17.38%
CX	66 Neutral	$7.68B	8.11	8.39%	1.65%	-5.07%	417.07%
MLM	63 Neutral	$28.98B	14.67	22.83%	0.65%	-3.56%	70.93%
Sector *	47 Neutral	$2.43B	-3.06	-22.76%	3.59%	4.02%	-29.07%

* Basic Materials Sector Average

Performance Comparison

JHX

James Hardie

22.55

-13.58

-37.59%

Cemex SAB

5.18

-3.11

-37.52%

EXP

Eagle Materials

223.78

-25.16

-10.11%

MLM

Martin Marietta Materials

491.69

-104.13

-17.48%

VMC

Vulcan Materials

242.30

-16.20

-6.27%

CRH

CRH plc

84.74

5.69

7.19%

James Hardie Earnings Call Summary

Earnings Call Date: Feb 18, 2025 | % Change Since: -29.15% | Next Earnings Date: May 26, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong strategic partnerships and growth in high-value products, bolstered by manufacturing efficiency. However, it also acknowledged challenges such as raw material cost inflation, volume declines in certain regions, and a tough European market. The company's ability to maintain strong margins and expand strategic agreements supports a positive sentiment despite these challenges.

Highlights

Strong North American Performance

North American business demonstrated strength with year-to-date sales over $2 billion, achieving a 29.1% EBIT margin, and maintaining peer-leading profitability despite challenging conditions.

Growth in High-Value Products in Europe

The European segment achieved double-digit growth in high-value products despite a challenging market environment.

M/I Homes Partnership

James Hardie announced a national multiyear exclusive hard siding and trim agreement with M/I Homes, expanding its market presence.

Record-Yield Manufacturing Efficiency

The Hardie Manufacturing Operating System (HMOS) has led to record-yield manufacturing efficiency, even in a year of lower volumes.

Innovative Product Offerings

The company continues to invest in innovative solutions like ColorPlus, which saw double-digit volume growth in single-family applications.

Lowlights

Raw Material Cost Inflation

Significant raw material cost inflation, particularly in pulp and cement, affected margins with mid-20% inflation in these materials.

Volume Decline in Asia Pacific

Asia Pacific segment experienced a 28% decrease in volumes, though this was partly due to ceasing operations in the Philippines.

Challenging European Market

Continued challenges in the European market, particularly in Germany, affecting growth despite high-value product performance.

Interest Rate and Demand Environment

High interest rates and challenging demand environment persist, presenting obstacles for growth in new construction and repair markets.

Company Guidance

During the James Hardie Fiscal Third Quarter 2025 Earnings Conference Call, the company provided guidance indicating strong business performance with North American sales year-to-date exceeding $2 billion, demonstrating a double-digit CAGR over the last five years. The adjusted EBITDA margin increased by over 400 basis points to approximately 35%, with an anticipated additional 500 basis points of margin opportunity in the future. Despite a challenging demand environment, the North American EBIT margin was reported at 29.1%, with a total adjusted net income of $154 million consolidated across regions. The company shipped 744 million standard feet of volume in North America, highlighting a robust execution of their growth strategy. The guidance reaffirmed their confidence in achieving at least 2.95 billion standard feet of North American volume for the full fiscal year, along with an EBIT margin of at least 29.3%, and adjusted net income of at least $635 million.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.