Macquarie Upgrades James Hardie Industries (JHX) to Outperform

Macquarie analyst Peter Steyn upgraded James Hardie Industries (NYSE: JHX) from Neutral to Outperform.

The analyst commented: "We acknowledge JHX's debt position -expecting ND/EBITDA of 3.3x in FY26 (affected by three quarters' of AZEK contribution). In a tough market environment this is certainly a risk. We expect a fairly rapid deleveraging - 2.4x in FY27 and 1.6x in FY28 -despite factoring in buybacks of USD250m in each of FY26 and FY27. The stock has been materially derated, partly
owing to the dilution of returns as a consequence of the AZEK deal. However, a ~30% discount to US peer, TREX, could come into sharper focus in time. We have dialled our SOTP back to mid-cycle EV/EBIT multiples of ~16x, which we believe is fair given the point in the cycle and our view on the emerging synergy story. We upgrade to Outperform, lifting TP to $46.80ps. We balance DCF and
SOTP to give expression to the AZEK integration over time."

For an analyst ratings summary and ratings history on James Hardie Industries click here. For more ratings news on James Hardie Industries click here.

Shares of James Hardie Industries closed at $26.94 yesterday.

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