James Hardie Industries’ rival Louisiana-Pacific (LP) has raised FY22 siding guidance to more-than 20% from more-than 15% as price increases offset cost inflation.
UBS does not believe the start-up of LP’s Sagola, Michigan mill conversion will inhibit James Hardies’ ability to increase volumes.
Meanwhile, LP management commentary suggests building demand remains strong and that mortgage concerns are not affecting the company’s outlook at this stage.
UBS’s read-through to James Hardie is that the company’s guidance is achieveable. Buy rating and $58 target price retained.
Sector: Materials.
Target price is $58.00.Current Price is $40.95. Difference: $17.05 – (brackets indicate current price is over target). If JHX meets the UBS target it will return approximately 29% (excluding dividends, fees and charges – negative figures indicate an expected loss).
