James Hardie Industries (ASX:JHX) - Share price, News & Analysis

Q: What is the Fair Price of JHX when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

JHX (A$35.98) is trading below our estimate of [[fair value]] (A$91.3)

JHX fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	4/6
Past Performance	5/6
Financial Health	4/6
Dividends	3/6

JHX Stock Overview

Rewards

Trading at 60.6% below our estimate of its fair value

Earnings are forecast to grow 11.41% per year

Earnings have grown 14.2% per year over the past 5 years

Risk Analysis

Has a high level of debt

James Hardie Industries Competitors

Brickworks

ASX:BKW

AU$3.2b

CSR

ASX:CSR

AU$2.2b

Adbri

ASX:ABC

AU$1.7b

Wagners Holding

ASX:WGN

AU$206.5m

Price History & Performance

Summary of all time highs, changes and price drops for James Hardie Industries
Historical stock prices
Current Share Price	AU$35.98
52 Week High	AU$58.07
52 Week Low	AU$28.60
Beta	1.13
1 Month Change	2.45%
3 Month Change	-6.47%
1 Year Change	-25.24%
3 Year Change	65.96%
5 Year Change	108.22%
Change since IPO	714.58%

Recent News & Updates

Aug 06

James Hardie Industries (ASX:JHX) Is Aiming To Keep Up Its Impressive Returns

To find a multi-bagger stock, what are the underlying trends we should look for in a business? Firstly, we'll want to...

Jul 22

What Does James Hardie Industries plc's (ASX:JHX) Share Price Indicate?

James Hardie Industries plc ( ASX:JHX ) saw a decent share price growth in the teens level on the ASX over the last few...

Shareholder Returns

	JHX	AU Basic Materials	AU Market
7D	2.2%	2.4%	1.0%
1Y	-25.2%	-31.0%	-7.9%

Return vs Industry: JHX exceeded the Australian Basic Materials industry which returned -31% over the past year.

Return vs Market: JHX underperformed the Australian Market which returned -7.9% over the past year.

Price Volatility

Is JHX's price volatile compared to industry and market?
JHX volatility
JHX Average Weekly Movement	6.2%
Basic Materials Industry Average Movement	6.2%
Market Average Movement	10.6%
10% most volatile stocks in AU Market	17.5%
10% least volatile stocks in AU Market	4.7%

Stable Share Price: JHX is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: JHX's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1888	n/a	Harold Wiens	https://www.ir.jameshardie.com.au

James Hardie Industries plc, together with its subsidiaries, manufactures and sells fiber cement, fiber gypsum, and cement bonded building products for interior and exterior building construction applications primarily in the United States, Australia, Europe, New Zealand, the Philippines, and Canada. The company operates through three segments: North America Fiber Cement, Asia Pacific Fiber Cement, and Europe Building Products. It offers fiber cement interior linings, exterior siding products, and related accessories; and various fiber cement building materials for a range of applications, including external siding, internal walls, floors, ceilings, soffits, trim, fences, and facades.

James Hardie Industries Fundamentals Summary

How do James Hardie Industries's earnings and revenue compare to its market cap?
JHX fundamental statistics
Market Cap	US$11.05b
Earnings (TTM)	US$459.10m
Revenue (TTM)	US$3.61b

24.1x

P/E Ratio

3.1x

P/S Ratio

Is JHX overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
JHX income statement (TTM)
Revenue	US$3.61b
Cost of Revenue	US$2.30b
Gross Profit	US$1.31b
Other Expenses	US$854.80m
Earnings	US$459.10m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 15, 2022

Earnings per share (EPS)	1.03
Gross Margin	36.35%
Net Profit Margin	12.70%
Debt/Equity Ratio	65.8%

How did JHX perform over the long term?

See historical performance and comparison

Dividends

2.4%

Current Dividend Yield

68%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is JHX undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for JHX?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for JHX. This is calculated by dividing JHX's market cap by their current preferred multiple.
What is JHX's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$11.05b

JHX key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	3.3x
Enterprise Value/EBITDA	12.1x
PEG Ratio	2.1x

Price to Earnings Ratio vs Peers

How does JHX's PE Ratio compare to its peers?

JHX PE Ratio vs Peers

The above table shows the PE ratio for JHX vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	10.7x
BKW Brickworks	4.3x	-38.7%	AU$3.2b
CSR CSR	8.3x	-5.7%	AU$2.2b
ABC Adbri	14.7x	6.9%	AU$1.7b
WGN Wagners Holding	15.5x	15.0%	AU$206.5m
JHX James Hardie Industries	24.1x	11.4%	AU$16.0b

Price-To-Earnings vs Peers: JHX is expensive based on its Price-To-Earnings Ratio (24.1x) compared to the peer average (10.7x).

Price to Earnings Ratio vs Industry

How does JHX's PE Ratio compare vs other companies in the Global Basic Materials Industry?

Price-To-Earnings vs Industry: JHX is expensive based on its Price-To-Earnings Ratio (24.1x) compared to the Global Basic Materials industry average (14.1x)

Price to Earnings Ratio vs Fair Ratio

What is JHX's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

JHX PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	24.1x
Fair PE Ratio	22.5x

Price-To-Earnings vs Fair Ratio: JHX is expensive based on its Price-To-Earnings Ratio (24.1x) compared to the estimated Fair Price-To-Earnings Ratio (22.5x).

Share Price vs Fair Value

What is the Fair Price of JHX when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: JHX (A$35.98) is trading below our estimate of fair value (A$91.3)

Significantly Below Fair Value: JHX is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Future Growth

How is James Hardie Industries forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

11.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: JHX's forecast earnings growth (11.4% per year) is above the savings rate (1.8%).

Earnings vs Market: JHX's earnings (11.4% per year) are forecast to grow faster than the Australian market (6.2% per year).

High Growth Earnings: JHX's earnings are forecast to grow, but not significantly.

Revenue vs Market: JHX's revenue (6.5% per year) is forecast to grow faster than the Australian market (5.7% per year).

High Growth Revenue: JHX's revenue (6.5% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: JHX's Return on Equity is forecast to be high in 3 years time (36%)

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Past Performance

How has James Hardie Industries performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

14.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: JHX has high quality earnings.

Growing Profit Margin: JHX's current net profit margins (12.7%) are higher than last year (9%).

Past Earnings Growth Analysis

Earnings Trend: JHX's earnings have grown by 14.2% per year over the past 5 years.

Accelerating Growth: JHX's earnings growth over the past year (74.7%) exceeds its 5-year average (14.2% per year).

Earnings vs Industry: JHX earnings growth over the past year (74.7%) underperformed the Basic Materials industry 85.2%.

Return on Equity

High ROE: JHX's Return on Equity (34.4%) is considered high.

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Financial Health

How is James Hardie Industries's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: JHX's short term assets ($1.1B) exceed its short term liabilities ($769.9M).

Long Term Liabilities: JHX's short term assets ($1.1B) do not cover its long term liabilities ($2.1B).

Debt to Equity History and Analysis

Debt Level: JHX's net debt to equity ratio (56.4%) is considered high.

Reducing Debt: JHX had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: JHX's debt is well covered by operating cash flow (86.3%).

Interest Coverage: JHX's interest payments on its debt are well covered by EBIT (20.7x coverage).

Balance Sheet

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Dividend

What is James Hardie Industries's current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

2.42%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: JHX's dividend (2.42%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.62%).

High Dividend: JHX's dividend (2.42%) is low compared to the top 25% of dividend payers in the Australian market (6.24%).

Stability and Growth of Payments

Stable Dividend: JHX's dividend payments have been volatile in the past 10 years.

Growing Dividend: JHX's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (67.8%), JHX's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (53.7%), JHX's dividend payments are covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

0.6yrs

Average management tenure

CEO

Harold Wiens (76 yo)

0.58

Tenure

US$576,504

Compensation

Mr. Harold J. Wiens, BS, serves as Interim Chief Executive Officer at James Hardie Industries plc since January 06, 2022. He served as an Independent Non-Executive Director at James Hardie Industries plc s...

Leadership Team

Experienced Management: JHX's management team is not considered experienced ( 0.6 years average tenure), which suggests a new team.

Board Members

Experienced Board: JHX's board of directors are considered experienced (3.8 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/07 00:00
End of Day Share Price	2022/08/05 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31