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James Hardie Industries PLC (JHX)
NYSE:JHX
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James Hardie Industries PLC
(NYSE:JHX)
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Rating:59Neutral
Price Target:
$24.50
▲(2.55% Upside)
Action:ReiteratedDate:02/12/26
The score is driven primarily by weakened profitability and cash conversion despite solid revenue growth, plus elevated valuation risk from a very high P/E. Offsetting factors include a constructive earnings call with raised guidance and synergy progress, and moderately supportive technicals with the stock above key moving averages.
Positive Factors
Acquisition integration & synergies
Realized and targeted synergies from the AZEK acquisition materially strengthen long-term margin recovery and cash generation. Achieving early cost and commercial synergies supports cross‑sell, scale economics and accelerates de‑leveraging, reducing structural execution risk if sustained.
Raised guidance and EBITDA strength
Upwardly revised EBITDA guidance and recent beat signal durable operational improvement and pricing/mix discipline. Higher recurring EBITDA supports long‑term cash flows and the ability to fund capital spending, synergies and debt reduction even in a modestly cyclical end market.
Sustained top-line growth
Consistent revenue growth underpins manufacturing scale and pricing leverage, enabling absorption of fixed costs and investment in product and distribution. Durable top‑line momentum provides a structural tailwind for margin recovery and long‑run cash generation.
Negative Factors
Profitability deterioration
Sharp margin compression and a large decline in net margin indicate weaker pricing/mix, absorption and/or one‑time items that impair earnings quality. Persistently lower margins reduce return on capital, free cash flow conversion and the company's ability to self‑finance growth or rapid deleveraging.
Elevated post‑close leverage
Higher leverage increases refinancing, interest and execution risk and leaves less flexibility for cyclical downturns or incremental investment. The balance sheet relies on successful synergy delivery and consistent cash conversion to hit the below‑2x target, making capital structure improvement contingent on operations.
Exposure to new construction weakness
Significant exposure to new residential construction makes revenue and volume recovery dependent on housing starts and permits. Prolonged market softness in key regions constrains organic growth, pressures absorption and delays margin normalization despite integration efforts.
James Hardie Industries PLC (JHX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$13.93B
Dividend YieldN/A
Average Volume (3M)6.46M
Price to Earnings (P/E)89.7
Beta (1Y)1.25
Revenue Growth-1.59%
EPS Growth-15.58%
CountryUS
Employees5,679
SectorBasic Materials
Sector Strength58
IndustryConstruction Materials
Share Statistics
EPS (TTM)0.24
Shares Outstanding583,240,000
10 Day Avg. Volume4,695,162
30 Day Avg. Volume6,457,115
Financial Highlights & Ratios
PEG Ratio-1.54
Price to Book (P/B)4.70
Price to Sales (P/S)2.62
P/FCF Ratio26.67
Enterprise Value/Market Cap1.32
Enterprise Value/Revenue4.19
Enterprise Value/Gross Profit11.68
Enterprise Value/Ebitda23.13
Forecast
1Y Price Target
$31.99Price Target Upside33.91% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)1.1
Revenue Forecast (FY)$4.85B
James Hardie Industries PLC Business Overview & Revenue Model
Company DescriptionJames Hardie Industries plc, together with its subsidiaries, manufactures and sells fiber cement, fiber gypsum, and cement bonded building products for interior and exterior building construction applications primarily in the United States, Australia, Europe, New Zealand, the Philippines, and Canada. The company operates through three segments: North America Fiber Cement, Asia Pacific Fiber Cement, and Europe Building Products. It offers fiber cement interior linings, exterior siding products, and related accessories; and various fiber cement building materials for a range of applications, including external siding, internal walls, floors, ceilings, soffits, trim, fences, and facades. The company also provides fiber gypsum and cement-bonded boards for applications, such as timber frame construction, dry lining, DIY, and structural fire protection. Its products are used in various markets comprising new residential construction and commercial construction markets. James Hardie Industries plc was founded in 1888 and is based in Dublin, Ireland.
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 Industries PLC Earnings Call Summary
Earnings Call Date:Feb 10, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:May 26, 2026
Earnings Call Sentiment Positive
The call presents a constructive operational and financial picture driven by the AZEK combination: consolidated revenue grew 30% (with organic sales +1%), adjusted EBITDA and margins beat expectations in several areas, early commercial and cost synergies have been realized and guidance was raised for key segments. However, core legacy fiber cement volumes remain pressured (organic Siding & Trim down and single-family volumes down high-single digits), new construction softness in key regions and elevated pro forma leverage (~3x) are notable near-term risks. Management is taking decisive actions—plant consolidations (saving ~$25M annually), salesforce alignment and targeted marketing—to drive material conversion and margin recovery, and they express confidence in hitting $125M in both cost and commercial synergies by exiting FY'27. Weighing the positive execution on integration, margin recovery, and segment outperformance against the ongoing softness in the siding core end market and elevated leverage, the overall tone is cautiously optimistic.Q3-2026 Updates
Positive Updates
Strong Consolidated Revenue and EBITDA Beat
Total net sales grew 30% year-over-year to $1.24B (including $275M from AZEK); organic sales +1%. Adjusted EBITDA was $330M with a 26.6% adjusted EBITDA margin, and adjusted net income was $142M (adjusted diluted EPS $0.24).
Siding & Trim Margin Improvement
Siding & Trim adjusted EBITDA of $269M and adjusted EBITDA margin of 34.1%, showing a nearly 500 basis point sequential improvement driven largely by price/mix favorability and operating discipline.
Deck, Rail & Accessories Outperformance
TimberTech/DR&A delivered mid-single-digit sell-through growth, outpacing the broader market (which declined low-single-digits). DR&A adjusted EBITDA was $49M with a 25.1% margin; management targets 500–700 bps outperformance vs. market.
Raised Guidance and Improved Full-Year EBITDA Range
Management increased Siding & Trim net sales guidance to $2.953B–$2.998B and modestly raised Siding & Trim adjusted EBITDA guidance to $939M–$962M. Company now expects full-year adjusted EBITDA of $1.232B–$1.263B.
Acquisition Integration and Synergy Progress
Integration with AZEK progressing well: surpassed FY'26 cost synergy goal, confident in $125M cost synergy target, and expect $125M annualized commercial synergy run rate exiting FY'27. Early commercial wins include distributor and dealer commitments.
Manufacturing Optimization and Cost Savings
Announced closure of 2 older plants and footprint balancing on January 15; expected annualized cost savings of approximately $25M beginning in Q1 FY'27 to improve utilization and reduce fixed costs.
Regional/International Strength
Australia & New Zealand net sales +7% (USD and AUD) with adjusted EBITDA $41M; Europe net sales +13% (3% in euros) and EBITDA margin up 240 bps to 12.7%, driven by volume leverage and lower input costs.
Cash Flow, Capital Discipline and Leverage Plan
Year-to-date free cash flow of $261M (includes land sale). CapEx guidance ~$400M for FY'26 (including $75M for AZEK). Net debt $4.3B with pro forma net leverage ~3x and commitment to reduce leverage below 2x within 2 years post-close.
Negative Updates
Siding & Trim Organic Declines and Volume Weakness
Legacy James Hardie North America fiber cement organic net sales declined 2% in the quarter. Single-family exteriors volumes were down high single digits, interiors down double digits; full-year organic net sales implied decline ~6% at midpoint of guidance.
New Construction Softness and Regional Headwinds
New home market remains challenged particularly in Texas, West and Southeast. Industry permits down 9% YoY and starts down 7% YTD; inventory elevated in some markets (Orlando, Jacksonville, Tampa, Atlanta).
Margin Pressure from Allocations and Absorption
Siding & Trim adjusted EBITDA margin was down ~70 basis points year-over-year after reallocation of $9M of R&D (a ~100 bps impact); unfavorable absorption and inflation in freight and raw materials also weighed on margins.
One-time Integration and Seasonal Costs Impacting Cash/EBITDA
Cash flow and margins were negatively impacted by one-time integration costs and seasonal AZEK production patterns; management expects integration costs to step down significantly in FY'27 but they dampened near-term free cash flow and margins.
Working Capital and Inventory Build
Pro forma inventory days increased to ~75 days (from ~71), reflecting phasing for commercial synergies and some seasonality; management expects normalization but short-term volatility and balance-sheet build exist.
Leverage Elevated Post-Close
Pro forma net leverage stands at approximately 3x for full-year '26 (midpoint), above the company's target (>2x reduction target within 2 years), which implies reliance on successful synergy delivery and cash generation to deleverage.
Inflationary Risk in Fiber Cement Inputs
Modest expectation of further input inflation on fiber cement (notably pulp) forecasted toward the back half of calendar 2027, which could pressure costs if realized.
Conservative Near-Term Free Cash Flow Guidance
Year-to-date free cash flow was $261M (including a land sale) but the company maintained a full-year free cash flow expectation of at least $200M, implying a conservative Q4 outlook and potential timing/working capital headwinds.
Company Guidance
The company raised FY‑26 guidance across key metrics: Siding & Trim net sales $2.953–$2.998B with adjusted EBITDA $939–$962M (midpoint implying ~6% organic net‑sales decline and a 31.9% adjusted‑EBITDA margin), Deck, Rail & Accessories net sales $787–$800M with adjusted EBITDA $219–$224M, and total company adjusted EBITDA $1.232–$1.263B. Q3 results included total net sales of $1.24B (+30%, incl. $275M AZEK), organic sales +1%, adjusted EBITDA $330M (26.6% margin), Siding & Trim EBITDA $269M (34.1% margin), and DR&A EBITDA $49M (25.1% margin). Financials also reflect adjusted net income $142M and adj. diluted EPS $0.24 in Q3, adjusted net interest ~$68M, a Q3 adjusted tax rate of 17.3% (FY guide ~19%), weighted average diluted shares ~583M, capex ~$400M for FY‑26 (incl. $75M AZEK) and long‑term NA capex of 6–7% of sales, at least $200M free cash flow for FY‑26, net debt $4.3B and pro‑forma net leverage ~3x at the midpoint with a commitment to get below 2x within two years. Management reiterated cost actions to deliver ~$25M of annual manufacturing savings starting FY‑27, exceeded FY‑26 cost‑synergy goals and remains confident in achieving $125M of cost synergies and $125M of annualized commercial‑synergy run‑rate exiting FY‑27.James Hardie Industries PLC Financial Statement Overview
Summary
Revenue is growing (~7% TTM), but profitability and quality of earnings have weakened materially: net margin fell to ~2.7% (from ~10.9% annual) and EBIT margin compressed to ~9.3% (from ~17.7%). Balance sheet leverage has increased (debt ~0.78x equity vs ~0.56x prior) and returns deteriorated (ROE ~2.8% vs ~19.6%). Free cash flow is positive (~206M) but down ~31% and well below net income, signaling softer cash conversion.Income Statement
TTM (Trailing-Twelve-Months) revenue is up ~7%, showing ongoing top-line momentum. However, profitability has weakened sharply versus the last annual period: net margin fell to ~2.7% in TTM (vs ~10.9% annual) and EBIT margin compressed to ~9.3% (vs ~17.7%), indicating meaningful cost/price or mix pressure. Gross margin also stepped down to ~35.9% from ~38.8% last year—still reasonable, but trending in the wrong direction.62
Positive
Balance Sheet
Leverage looks moderate on the latest balance sheet snapshot with debt at ~0.78x equity in TTM (higher than ~0.56x in the most recent annual period), suggesting increased reliance on debt. Equity is sizable relative to assets, but returns have deteriorated materially: return on equity is ~2.8% in TTM versus ~19.6% last year, consistent with the drop in earnings power. Overall, the balance sheet is workable, but the recent leverage uptick and weaker returns reduce financial flexibility.55
Neutral
Cash Flow
Cash generation remains positive, with TTM operating cash flow of ~600M and free cash flow of ~206M, but free cash flow declined ~31% versus the prior period, pointing to weaker cash conversion and/or higher capital spending needs. Free cash flow is well below net income in TTM (about one-third of earnings), which is a red flag for earnings quality. Operating cash flow also covers less than the full level of net income in TTM, reinforcing that near-term cash conversion has softened versus the stronger annual profile.49
Neutral
| Breakdown | TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.40B | 3.88B | 3.94B | 3.78B | 3.61B | 2.91B |
| Gross Profit | 1.58B | 1.50B | 1.59B | 1.31B | 1.31B | 1.05B |
| EBITDA | 797.30M | 902.60M | 976.20M | 933.10M | 844.20M | 594.80M |
| Net Income | 119.10M | 424.00M | 510.20M | 512.00M | 459.10M | 262.80M |
Balance Sheet | ||||||
| Total Assets | 13.80B | 5.23B | 4.91B | 4.48B | 4.24B | 4.09B |
| Cash, Cash Equivalents and Short-Term Investments | 562.20M | 562.70M | 365.00M | 113.00M | 125.00M | 208.50M |
| Total Debt | 4.97B | 1.21B | 1.20B | 1.14B | 955.50M | 922.60M |
| Total Liabilities | 7.41B | 3.07B | 3.05B | 2.87B | 2.91B | 3.03B |
| Stockholders Equity | 6.40B | 2.16B | 1.86B | 1.61B | 1.33B | 1.06B |
Cash Flow | ||||||
| Free Cash Flow | 205.88M | 380.60M | 464.90M | 16.30M | 499.40M | 676.20M |
| Operating Cash Flow | 600.06M | 802.80M | 914.20M | 607.60M | 757.20M | 786.90M |
| Investing Cash Flow | -4.24B | -446.70M | -470.50M | -660.10M | -348.20M | -120.40M |
| Financing Cash Flow | 3.46B | -165.90M | -210.10M | -25.40M | -449.60M | -540.20M |
James Hardie Industries PLC Technical Analysis
Neutral
23.89
Price Trends
19.88
Negative
Market Momentum
-1.05
Positive
39.55
Neutral
45.56
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 23.89 is above the 20-day moving average (MA) of 19.16, above the 50-day MA of 19.88, and equal to the 200-day MA of ―, indicating a neutral trend. The MACD of -1.05 indicates Positive momentum. The RSI at 39.55 is Neutral, neither overbought nor oversold. The STOCH value of 45.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JHX.
James Hardie Industries PLC Risk Analysis
James Hardie Industries PLC disclosed 1 risk factors in its most recent earnings report. James Hardie Industries PLC 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 Industries PLC Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $39.98B | 38.21 | 12.99% | 0.67% | 6.54% | 32.48% | |
72 Outperform | $40.13B | 36.06 | 10.65% | 0.51% | 1.99% | -41.08% | |
71 Outperform | $18.46B | 18.82 | 3.14% | 0.74% | -6.34% | 210.97% | |
70 Outperform | $6.89B | 16.95 | 28.77% | 0.47% | 1.50% | -4.44% | |
70 Outperform | $78.67B | 21.78 | 15.21% | 1.17% | 4.28% | 0.39% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
59 Neutral | $13.93B | 89.68 | 2.80% | ― | -1.59% | -15.58% |
* Basic Materials Sector Average
JHX
James Hardie Industries PLC
23.89
-4.46
-15.73%
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12.15
6.29
107.16%
EXP
Eagle Materials
219.15
1.39
0.64%
MLM
Martin Marietta Materials
665.35
198.06
42.38%
VMC
Vulcan Materials
306.20
68.20
28.66%
CRH
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117.72
19.20
19.49%
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.