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Investing.com - Jefferies lowered its price target on James Hardie Industries (NYSE:JHX) to $30.00 from $34.00 on Wednesday, while maintaining a Buy rating on the building materials manufacturer. The company, with a market capitalization of $11.8 billion, is currently trading below InvestingPro’s Fair Value estimate.
The price target reduction follows James Hardie’s first-quarter fiscal 2025 results, which Jefferies described as "softer" than expected, with the company’s full-year guidance coming in "much weaker than expected." Despite these challenges, the company maintains strong financial health with a current ratio of 2.1 and an Altman Z-Score of 7.52, indicating solid financial stability.
According to Jefferies, the shortfall in guidance was primarily driven by a downturn in single-family new construction, particularly in the South, along with inventory destocking in distribution channels.
The firm noted that North American fiber cement is showing more cyclicality than previously appreciated, though Jefferies believes the long-term secular growth drivers in siding and decking markets remain intact.
Despite the near-term challenges, Jefferies highlighted that James Hardie has achieved "quick wins" in PVC trim products and suggested that management has likely provided conservative guidance for the remainder of the fiscal year.
In other recent news, James Hardie Industries reported its first-quarter earnings for fiscal year 2026, which fell short of expectations. The company’s earnings per share (EPS) were reported at $0.29, missing the anticipated $0.35, resulting in a negative surprise of 17.14%. Additionally, James Hardie’s revenue for the quarter was $899.9 million, which did not meet the forecasted $950.68 million, marking a 5.34% shortfall. These results highlight a challenging start to the fiscal year for the company. Analysts had expected stronger performance, and the earnings miss may prompt further analysis from investment firms. Investors will likely be watching closely for any strategic changes or updates from the company in response to these financial results. These developments are crucial for stakeholders as they assess the company’s future trajectory.
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