James Hardie’s September-quarter profit beat UBS by 6% and the FY22 profit guidance range has been raised by 4% at the midpoint, on the back of 9% growth in North America.
The company is still targeting a longer term mix of 66% of high-value product in the region. The broker believes substitution will slow over time but agrees with the strategy of targeting not just high-value but high-quality leads.
James Hardie is also “prudently” adding capacity in all of North America, Europe and Asia-Pacific. Target rises to $59.80 from $54.70, Buy retained.
Sector: Materials.
Target price is $59.80.Current Price is $54.77. Difference: $5.03 – (brackets indicate current price is over target). If JHX meets the UBS target it will return approximately 8% (excluding dividends, fees and charges – negative figures indicate an expected loss).
