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Investing.com - UBS has downgraded James Hardie Industries (NYSE:JHX) (JHX:AU) from Buy to Neutral, while significantly reducing its price target to AUD36.00 from AUD50.00.
The downgrade follows James Hardie’s first-quarter results, which showed a 29% decline in UNPAT (underlying net profit after tax) compared to the previous corresponding period, falling 19% below consensus forecasts.
North American operations were particularly weak, with EBIT (earnings before interest and tax) coming in 17% below consensus expectations due to challenging volume conditions. The company reported North American volumes down 14%, despite average selling prices increasing by 3%.
James Hardie noted that volumes in its core Southern states market, which represents 60% of its single-family exteriors business, declined by more than 20%. This drop occurred despite U.S. Census data indicating single-family starts in the South were only down 8% from January to March.
UBS attributed the volume decline to distributors taking a more defensive approach to inventory amid demand uncertainty, with persistently high interest rates, tariff volatility, and ongoing affordability challenges causing homebuilders to reduce production rates.
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