Should You Investigate James Hardie Industries plc (ASX:JHX) At AU$43.86?

Let's talk about the popular James Hardie Industries plc (ASX:JHX). The company's shares saw a significant share price rise of over 20% in the past couple of months on the ASX. 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.

See our latest analysis for James Hardie Industries

What Is James Hardie Industries Worth?

Good news, investors! James Hardie Industries is still a bargain right now. My valuation model shows that the intrinsic value for the stock is A$59.36, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, James Hardie Industries’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

Can we expect growth from James Hardie Industries?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. James Hardie Industries' earnings over the next few years are expected to increase by 52%, 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? Since JHX is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on JHX for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy JHX. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

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 - James Hardie Industries has 1 warning sign we think you should be aware of.

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.