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BofA raises James Hardie stock target, retains underperform

EditorBrando Bricchi
Published 10/04/2024, 04:44 am
JHX
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On Tuesday, BofA Securities updated its outlook on James Hardie Industries (NYSE:JHX:AU) (NYSE: JHX), raising the price target to AUD 54.85 from AUD 53.35, while maintaining an Underperform rating on the stock. The firm's analyst cited a cautious stance ahead of the company's fiscal year 2024 results, which are expected to be released in mid-May.

The analyst's revised estimates for the fourth quarter fiscal year 2024 net profit after tax (NPAT) remain at $174 million, aligning with the company's guidance range of $165-185 million but falling short of the consensus estimate of $181 million. Additionally, the first quarter fiscal year 2025 NPAT estimate has been adjusted to $179 million, compared to the consensus of $187 million.

For the fiscal year 2025, BofA Securities forecasts an NPAT of $739 million for James Hardie, which is 4% below the consensus. The revised projections take into account recent data on demand and commodity price movements. Despite the adjustments, the firm expects North America revenue growth for James Hardie of 9% and 10% for fiscal years 2025 and 2026, respectively. This growth projection is believed to adequately reflect the strong housing market outlook in the United States.

The price objective (PO) has been increased to AUD 54.85, which equates to approximately USD 36.20, up from the previous target of AUD 53.35 or USD 35.20. This adjustment reflects the latest financial expectations and market conditions as analyzed by BofA Securities. James Hardie Industries is known for its building and construction products, particularly fiber cement siding and backer board.

InvestingPro Insights

According to InvestingPro's real-time data, James Hardie Industries (JHX) boasts a market capitalization of $17.03 billion, underlining its significant presence in the building and construction sector. The company's P/E ratio stands at 31.92, which may suggest a premium valuation compared to the industry average, especially given its high Price / Book multiple of 8.87. In terms of performance, JHX has experienced substantial growth, with a 53.83% price total return over the last six months and an impressive 85.85% return over the past year, indicating strong investor confidence and market momentum.

InvestingPro Tips highlight several strategic and financial aspects of JHX. The management's aggressive share buybacks could be a positive signal about the company's valuation and future prospects. Despite four analysts revising their earnings downwards for the upcoming period, the company still trades near its 52-week high, which may interest momentum investors. Additionally, the company's cash flows can sufficiently cover interest payments, suggesting financial stability. For those seeking further insights, InvestingPro offers an additional 15 tips on JHX, which could be invaluable for making informed investment decisions.

For readers looking to delve deeper into James Hardie Industries' financials and forecasts, InvestingPro provides a comprehensive analysis, and readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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