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CHICAGO - James Hardie Building Products Inc. (NYSE: JHX), the North American leader in fiber cement home siding with a market capitalization of nearly $10 billion, has entered into an exclusive multi-year supply agreement with Stanley Martin Homes, CastleRock Communities, and Trumark Homes, all subsidiaries of Daiwa House USA Holdings Inc. This partnership, announced today, positions James Hardie as the sole provider of siding and trim for the new homes constructed by these builders through the end of 2027. According to InvestingPro analysis, the company maintains strong financial health with a GOOD overall rating, suggesting solid fundamentals to support this expansion.
The collaboration is expected to enhance the quality of new housing developments across the United States, with James Hardie’s Hardie® siding and trim products becoming standard in select homes. The company’s products are known for their durability, noncombustibility, and resistance to pests, water, and extreme weather conditions. With a healthy gross profit margin of 39.45% and strong liquidity indicated by a current ratio of 2.18, the company appears well-positioned to meet the demands of this significant agreement. For detailed financial analysis and additional insights, investors can access the comprehensive Pro Research Report available on InvestingPro.
According to Steve Alloy, Executive Chairman of Daiwa House USA, this agreement will allow them to offer top-notch exterior design solutions to homeowners. Sean Gadd, President of James Hardie North America, also expressed his enthusiasm for the partnership, emphasizing their commitment to innovation and quality.
The deal is significant for James Hardie, as it reinforces their market leadership and commitment to setting industry standards. The company’s products are celebrated for their resilient beauty and design versatility, providing homeowners with a trusted option for exterior home solutions.
This strategic move by James Hardie and Daiwa House USA’s subsidiaries is anticipated to set a new benchmark in homebuilding, delivering quality and aesthetic appeal to a broad range of buyers. Despite recent share price volatility, with the stock down about 27% over the past six months, InvestingPro analysis suggests the company remains undervalued, with multiple positive indicators including strong cash flows and moderate debt levels.
The information for this article is based on a press release statement.
In other recent news, James Hardie Industries has announced a definitive agreement to acquire The AZEK Company for $8.75 billion, including AZEK’s net debt of $386 million. This acquisition is expected to increase James Hardie’s revenue to approximately $5.4 billion and enhance its EBITDA margin to 27% on a pro forma basis. Following this announcement, Moody’s revised James Hardie’s outlook to stable, reflecting the additional leverage from the acquisition and the potential for growth in revenue and market reach. Concurrently, Moody’s has placed AZEK’s ratings under review for a potential upgrade due to the anticipated benefits of the merger.
In other developments, James Hardie has launched an AI-powered home design tool in collaboration with Hover, allowing homeowners to visualize their home’s exterior with Hardie® products. This innovation aims to simplify the home renovation process and enhance customer decision-making. On the analyst front, BofA Securities upgraded James Hardie’s stock to a Buy rating, raising the price target to AUD43.40, citing the potential for earnings per share accretion from the AZEK acquisition. Truist Securities also reiterated its Buy rating, maintaining a price target of $45.00 and highlighting the strategic value of James Hardie’s recent business collaborations. These developments underscore James Hardie’s ongoing efforts to expand its market presence and leverage technological advancements in the building products industry.
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