Is It Too Late To Consider Buying James Hardie Industries plc (ASX:JHX)?

Let's talk about the popular James Hardie Industries plc (ASX:JHX). The company's shares received a lot of attention from a substantial price increase on the ASX over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Today I will analyse the most recent data on James Hardie Industries’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for James Hardie Industries

What's The Opportunity In James Hardie Industries?

According to my valuation model, James Hardie Industries seems to be fairly priced at around 18% below my intrinsic value, which means if you buy James Hardie Industries today, you’d be paying a reasonable price for it. And if you believe the company’s true value is A$56.92, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, James Hardie Industries’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from James Hardie Industries?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. James Hardie Industries' earnings over the next few years are expected to increase by 65%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? JHX’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on JHX, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about James Hardie Industries as a business, it's important to be aware of any risks it's facing. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of James Hardie Industries.

If you are no longer interested in James Hardie Industries, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.