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On Wednesday, Truist Securities adjusted its outlook on James Hardie Industries (NYSE:JHX), reducing the price target to $35.00 from the previous $45.00, while retaining a Buy rating on the stock. The revision follows the company’s latest financial results, which aligned with market expectations amidst a challenging environment. With a current market capitalization of $10.64 billion and trading at $24.73, InvestingPro analysis suggests the stock is currently undervalued.
Keith Hughes of Truist Securities noted that the management’s forecast suggests only a slight growth for 2025, which is considered favorable compared to many competitors in the Building Products sector. This anticipated growth is attributed to effective pricing strategies that are expected to counterbalance the reduced market-driven volume. The company’s solid financial health is reflected in its strong liquidity position, with a current ratio of 2.18 and modest revenue growth of 1.6% in the last twelve months.
James Hardie Industries’ performance in the North American market is influenced by multifamily and interior goods segments, yet the core exterior siding business in the single-family market is experiencing growth, as indicated by the reported figures. This growth comes in spite of the overall weak market conditions.
However, the guidance provided by James Hardie’s management was less optimistic than the expectations of analysts, leading to the adjustment in the price target. Hughes pointed out that the mainly Australian sell-side analysts have often included results from competitors like AZEK in their assessments, which could skew comparisons.
In conclusion, while acknowledging the subdued market outlook, Truist Securities remains confident in James Hardie Industries’ potential, sustaining a Buy rating but with a reduced price target to reflect the current market dynamics and company guidance. Trading at a P/E ratio of 32.34, the stock shows potential for value investors, as indicated by InvestingPro’s comprehensive Fair Value analysis.
In other recent news, James Hardie Industries has made several notable strides in its business operations. BofA Securities has maintained its Buy rating on James Hardie, affirming a $28 price target, citing a potential 22% return opportunity despite a recent stock drop. Analysts project a fiscal year 2026 EBITDA of $1,147 million, aligning with the company’s expectations of low single-digit growth. James Hardie has also secured an exclusive three-year agreement with McKinley Homes to supply Hardie® siding and trim for new developments across five Southeastern U.S. states until 2027. Additionally, the company expanded its partnership with CBH Homes, making it the first Idaho-based builder to offer a complete suite of Hardie® products, enhancing design options for homebuyers. A multi-year supply agreement was also reached with Daiwa House USA Holdings Inc.’s subsidiaries, Stanley Martin Homes, CastleRock Communities, and Trumark Homes, positioning James Hardie as the sole provider of siding and trim for new homes. Furthermore, James Hardie Industries has submitted its latest report to shareholders, detailing current company affairs and maintaining transparency through compliance with international reporting standards. These developments highlight James Hardie’s ongoing efforts to strengthen its market position and expand its product reach.
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