James Hardie (ASX:JHX): Evaluating Valuation After Strong Q2 Sales and Early AZEK Integration Gains

James Hardie Industries (ASX:JHX) just posted preliminary results for the second quarter of fiscal 2026, highlighting a sharp rise in net sales compared to the previous year. The strong showing was powered by increased demand for siding and trim products along with early gains from AZEK integration.

See our latest analysis for James Hardie Industries.

After a sharp selloff earlier this year, James Hardie Industries shares have staged an impressive rebound, surging more than 10% over the past week as investors digested news of resilient sales and early contributions from AZEK. Despite this short-term momentum, the 1-year total shareholder return remains deep in the red at -36.5%, reflecting both recent volatility and the challenges the company has faced. The bounce hints at renewed optimism for a turnaround as management integrates new assets and charts a clearer growth path.

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With shares rebounding after a steep decline and the company delivering better-than-expected sales, investors are left to wonder: is James Hardie Industries now trading at a bargain, or are markets already factoring in the next stage of growth?

Most Popular Narrative: 5.4% Undervalued

James Hardie Industries is trading just below the average fair value pegged by the most-followed narrative, suggesting the market may be overlooking some near-term optimism for operational gains and merger benefits.

Synergy capture from the AZEK merger is already showing tangible cost reductions, with management reaffirming cost savings targets ($125 million over 3 years) and planning for over $500 million of commercial synergies within 5 years. This provides clear visibility to EBITDA margin expansion and earnings growth.

Read the complete narrative.

Want a behind-the-scenes look at the financial logic behind this valuation? The narrative’s calculations hinge on bold, potentially game-changing assumptions about future revenue, profit margins, and ambitious earnings targets. Discover which forecasts are steering this outlook and how much needs to go right to justify the premium.

Result: Fair Value of $35.01 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent softness in new home construction or setbacks in integrating AZEK could quickly challenge the current optimistic outlook for James Hardie Industries.

Find out about the key risks to this James Hardie Industries narrative.

Build Your Own James Hardie Industries Narrative

If you’re keen to challenge these conclusions or think your own analysis tells a different story, you can easily build your perspective in under three minutes by starting with Do it your way.

A great starting point for your James Hardie Industries research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.

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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.

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