Fund Manager Summary
The fund managers believe that the outlook for James Hardie Industries plc presents a significant investment opportunity despite recent market corrections. They note that the company's strong position as a market leader in fibre cement siding and its evolving business mix—65% of revenues from repair and remodel—enhances its resilience against downturns in U.S. housing demand. In their opinion, the recent decline in share price, attributed to rising mortgage rates and recession fears, has resulted in an attractive valuation, with a FY23 consensus P/E of only ~13x compared to its historical average of 20-25x. They assert that the market is overestimating the potential decline in earnings, suggesting a ~40% drop that mirrors past cyclical impacts, yet the current business model is less vulnerable. Overall, the fund managers express confidence in James Hardie's long-term growth potential.
Source: Trading View
Commentary From The Managers
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Pendal Group
3 Nov 2025
$31.68
Summary
- Pendal Group notes that James Hardie (JHX, -5.6%) has faced significant governance challenges.
- Three directors, including the Chair, were voted off the board, highlighting investor dissatisfaction.
- The controversial acquisition of AZEK was conducted in a manner that avoided a shareholder vote.
- This acquisition involved issuing a large amount of equity and changing the primary listing to the US.
- Such changes could lead to a potential delisting from Australia, raising further concerns among investors.
- The removal of these directors is seen as a crucial step towards rebuilding investor trust.
- Pendal Group continues to hold its position in JHX as it monitors the company's governance and strategic direction.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Pendal Group
3 Nov 2025
$31.68
- Pendal Group notes that James Hardie (JHX, -5.6%) has faced significant governance challenges.
- Three directors, including the Chair, were voted off the board, highlighting investor dissatisfaction.
- The controversial acquisition of AZEK was conducted in a manner that avoided a shareholder vote.
- This acquisition involved issuing a large amount of equity and changing the primary listing to the US.
- Such changes could lead to a potential delisting from Australia, raising further concerns among investors.
- The removal of these directors is seen as a crucial step towards rebuilding investor trust.
- Pendal Group continues to hold its position in JHX as it monitors the company's governance and strategic direction.
Summary
ECP Asset Management
31 Oct 2025
$32.21
- James Hardie Industries (JHX) was a key outperformer in October.
- The stock rebounded from recent lows following a 2Q trading update indicating stabilizing market conditions.
- While housing and Repair & Remodel (R&R) markets remain soft, the acute destocking headwind has abated.
- Sales volumes have normalized.
- ECP Asset Management remains constructive on JHX, viewing it as the premier pure-play operator in North American building materials.
- The company’s dominant siding franchise and strategic expansion into complementary categories position it for strong medium-term earnings growth.
Summary
Infinity Asset Management
30 Sept 2025
$28.08
- Infinity Asset Management exited their position in James Hardie (JHX).
- The 1Q26 result in August showed NPAT was 16% below market expectations due to lower sales volumes in North America.
- FY26 guidance was soft, approximately 15% below consensus prior to the result.
- Uncertainty remains regarding the continuation of customer destocking in Q2 and Q3.
- No signs of stabilization in the significant fall of single family new construction in the South.
- Continued declines in house prices, low housing market turnover, and flat consumer sentiment are affecting the R&R market, crucial for JHX.
- While synergy opportunities from the AZEK acquisition are promising, managing a large acquisition in a challenging environment may be difficult.
- Infinity Asset Management deemed it prudent to exit until clearer indications of a turnaround emerge.
Summary
Yarra Capital Management
30 Sept 2025
$28.08
- James Hardie (JHX, underweight) – the leading building material supplier has underperformed recently.
- 1Q26 results were significantly weaker than expected, showing a 12% drop in North American sales.
- Adjusted EBITDA declined by 21%.
- The company updated its FY26 outlook, suggesting weaker operating conditions for both the core JHX business and the AZEK acquisition.
- Yarra Capital Management continues to hold an underweight position due to concerns over the slowing US housing market.
- Competitive dynamics and an elevated debt position following the AZEK acquisition are additional factors influencing this stance.
Summary
DS Capital
30 Sept 2025
$28.08
- DS Capital identified an attractive investment opportunity in James Hardie Industries plc following a recent US acquisition.
- The fund manager noted that sentiment in the building materials sector has been negatively impacted.
- Recent share price declines were attributed to a soft quarterly update and downgraded guidance.
- Weaker demand has led customers to conservatively manage inventory levels.
- Despite the downgrade, DS Capital believes it is cyclical in nature.
- The fund manager remains confident in James Hardie’s market-leading products.
- DS Capital sees potential for the company to benefit from the long-term trend of addressing the US housing shortage.
Summary
Antares Capital
31 Aug 2025
$30.40
- Antares Capital initiated positions in James Hardie (JHX) in August.
- Quickly reassessed the investment due to disclosure of poor August results.
- Continues to monitor market conditions and company performance.
- Focus on long-term growth potential despite short-term challenges.
- Investment thesis remains under review as new information emerges.
Summary
ECP Asset Management
31 Aug 2025
$30.40
- James Hardie Industries (JHX) underperformed in August due to management's FY26 guidance.
- Weak market conditions in the new housing and R&R segment of North America impacted performance.
- The recent Azek acquisition and macroeconomic uncertainty contributed to guidance below market expectations.
- Despite challenges, JHX is recognized as a high-quality building materials company.
- There are opportunities for revenue synergies from the combination of its siding and Azek decking businesses.
- ECP Asset Management remains confident that we are closer to the bottom of the cycle.
- Expectations for strong mid to long-term earnings performance from JHX are maintained.
Summary
Kardinia Capital
31 Aug 2025
$30.40
- Kardinia Capital sold their investment due to James Hardie's 1Q26 results falling significantly short of market expectations.
- The disappointing results were attributed to weak end markets, particularly in US housing construction.
- There was also significant channel de-stocking, impacting performance.
- The fund was stopped out of both positions, which helped mitigate potential losses.
- This decision was made to limit damage from further declines following the disappointing results.
Summary
Blackwattle Investment Partners
31 Aug 2025
$30.40
- Blackwattle Investment Partners sold their investment following the AZEK acquisition.
- The decision was timely due to subsequent earnings downgrades indicating material risks.
- Despite the high quality of the fibre cement business, the premium paid for AZEK has negatively impacted returns.
- The balance sheet has shown signs of weakness post-acquisition.
- A sharp decline in fibre cement volumes in 1Q may suggest execution missteps or management distraction.
- The combination of a significant leadership overhaul and a transformational acquisition is proving to be disruptive.
Summary
Perennial Partners
31 Aug 2025
$30.40
- Perennial Partners notes that James Hardie experienced a significant sell-off of -24.5% following a weak Q1’26 trading update.
- The update revealed a sharp deterioration in US new home construction activity.
- This situation has raised further questions regarding management integrity.
- Despite these challenges, Perennial Partners views this as a more cyclical issue rather than structural.
- The firm believes James Hardie remains a high-quality business with material upside potential.
Summary
Pendal Group
31 Aug 2025
$30.40
- Pendal Group notes a significant downgrade in FY26 earnings expectations for JHX.
- 1Q26 results showed a substantial miss, indicating challenges in performance.
- Weaker new construction activity and customer destocking have led to management's expectation of double-digit volume declines in FY26.
- This shift has resulted in lower margins than previously anticipated.
- Guidance for FY26 related to the recent AZEK acquisition has also been materially reduced.
- The downgrade to FY26 EPS is approximately 40%, further impacted by JHX’s high gearing following the AZEK acquisition.
- Pendal Group continues to hold its position, reflecting ongoing assessment of these developments.
Summary
Seneca Financial Solutions
31 Aug 2025
$30.40
- James Hardie (JHX) shares experienced a 30% decline due to weaker-than-expected Q1 results.
- A sharp downgrade to FY26 earnings guidance contributed to the decision.
- Softer demand in North America was a key factor in the share price drop.
- The AZEK acquisition led to higher leverage, raising concerns about financial stability.
- Balance sheet concerns prompted a significant valuation de-rating.
- As a result, Seneca Financial Solutions sold their position during the month.
Summary
Infinity Asset Management
31 Aug 2025
$30.40
- Infinity Asset Management sold their investment in James Hardie (JHX) after a significant decline of 24.6% in August.
- The 1Q26 result was a substantial miss compared to consensus, indicating a very challenging environment.
- A 16% miss on NPAT was attributed to lower sales volumes in North America, raising concerns about the lack of a profit warning prior to the release.
- There is uncertainty regarding customer destocking trends in 2Q26 and 3Q26, as indicated by management on the call.
- No signs of stabilization in the significant decline of single family new construction in the South were noted.
- In the US, there are ongoing house price declines, low housing market turnover, and flat consumer sentiment, all of which impact the R&R market crucial for JHX.
- While the synergy opportunities from the AZEK acquisition are promising in the medium to long term, the integration of a large and expensive acquisition poses challenges in the current environment.
- Given the higher levels of risk and uncertainty, Infinity Asset Management deemed it prudent to exit their position.
- Having more than doubled their investment in JHX over the years, they believe that macro uncertainty in the US remains too high despite potential near-term rate cuts from the Fed.
- These cuts would take considerable time to influence housing market activity, prompting their decision to exit.
Summary
Equity Trustees Asset Management
30 June 2025
$41.70
- Equity Trustees Asset Management notes a negative outlook for housing in North America, impacting both new construction and remodels.
- High mortgage rates and economic uncertainty are persistent factors affecting the market.
- The fund manager believes this situation is unlikely to improve in the short term.
- Equity Trustees Asset Management anticipates that JHX will struggle to perform under these conditions.
- Management has pursued a significant merger with an outdoor decking company.
- However, Equity Trustees Asset Management views this merger as potentially increasing the company's vulnerability rather than enhancing its resilience.
Summary
Wilson Asset Management
30 June 2025
$41.70
- Wilson Asset Management notes the completion of the merger between James Hardie Industries and The AZEK Company on 1 July.
- The acquisition is expected to expand the addressable market for James Hardie Industries.
- This merger is anticipated to accelerate growth through continued material conversion.
- Despite facing near-term market headwinds, the long-term structural fundamentals of the U.S. housing market remain positive.
- Wilson Asset Management remains constructive on the company's ability to execute the integration with AZEK.
- James Hardie Industries continues to be a key holding in the WAM Leaders investment portfolio.
Summary
Airlie Funds Management
30 June 2025
$41.70
- Airlie Funds Management expresses concern over the recent acquisition of the AZEK Company by James Hardie (ASX: JHX).
- The acquisition is viewed as a "transformational" transaction that is significantly dilutive to earnings.
- There is disappointment regarding the board's decision to secure a waiver from the ASX, preventing shareholder voting on the deal.
- This decision reflects a staggering misunderstanding of the board's duty to protect minority shareholders' interests.
- Airlie Funds Management emphasizes the importance of a thoughtful and responsible board in capital allocation decisions.
Summary
First Sentier Investors
30 June 2025
$41.70
- First Sentier Investors sold their investment in James Hardie Industries (JHX) due to concerns about the health of the US housing market.
- The US repair and remodel market is subdued, impacted by low consumer confidence and low housing turnover.
- The US single family new construction market is facing challenges due to buyer affordability issues and rising housing inventories.
- Another reason for the position change was the analysis of JHX’s inorganic growth ambitions, which could dilute existing high returns.
- JHX announced an acquisition of The AZEK Company Inc. at a 37% premium, raising concerns about the deal's impact.
- The acquisition led to controversy regarding corporate governance and the shift of JHX’s primary listing to the NYSE.
- Shareholders were not given a say in the move to the NYSE, raising governance concerns.
- First Sentier Investors engaged with the JHX board regarding the need for shareholder approval for significant moves in the future.
Summary
L1 Capital
30 June 2025
$41.70
- James Hardie shares recovered by +18% over the month following a negative reaction to the Azek acquisition announcement in late March 2025.
- The acquisition was approved by Azek shareholders on 30 June, with completion shortly thereafter.
- L1 Capital believes this has led to renewed interest from U.S. investors, reflected in a significant increase in U.S. liquidity post-transaction.
- The market outlook remains difficult and uncertain, with large U.S. homebuilders reporting weak demand trends during the spring selling season.
- Home buyers are facing challenges due to high mortgage rates and declining affordability metrics.
- Tariff volatility is impacting consumer confidence across the sector.
- L1 Capital views these impacts as transitory, expecting improvement over the next 1-2 years as interest rates decline.
- James Hardie, alongside Azek, is positioned as a secular share gainer in attractive verticals within the building products industry.
- L1 Capital continues to see further upside from current share price levels.
Summary
ECP Asset Management
30 June 2025
$41.70
- James Hardie Industries (JHX) outperformed in June.
- The market is now considering the Azek acquisition in its evaluations.
- Investors are focusing on the combined entity and its value creation story.
- While North American housing remains weak, there are signs of improvement in volumes.
- Commentary from the homebuilding sector is becoming more positive.
- Azek's sales growth momentum has been favorable, gaining market share from the wood segment.
- North American analysts are upgrading expectations for JHX.
- JHX is recognized as a high-quality company with strong cyclical exposure.
- The Azek acquisition enhances JHX's opportunities in the housing recovery.
Summary
Ten Cap
31 May 2025
$35.94
- Ten Cap has further reduced their position in James Hardie (JHX) after a short-term price rally.
- Recent results have been disappointing, prompting a reassessment of their investment.
- There are deteriorating indicators in the U.S. housing market, which contribute to their cautious outlook.
- Factors such as rising bond yields and weaker consumer sentiment are influencing their investment thesis.
Summary
Greencape Capital
6 May 2025
$37.47
- Greencape Capital sold their investment in James Hardie due to concerns over the acquisition of Azek.
- Azek shareholders will receive $US26.45 in cash and 1.034 ordinary James Hardie shares.
- Portfolio manager David Pace criticized the deal for being overpriced, especially given the downturn in the US housing market.
- Pace warned of significant impacts if the US housing market corrects sharply.
- After a recent meeting with Chair Anne Lloyd, Pace decided to sell out of James Hardie due to concerns of overpayment for Azek.
- Azek documents highlight that James Hardie’s increased debt could impair its ability to adapt to changing economic conditions.
Summary
ECP Asset Management
31 Mar 2025
$38.48
- ECP Asset Management notes that James Hardie Industries (JHX) underperformed during the month.
- The company announced a proposed acquisition of Azek, a US-based composite decking manufacturer.
- This acquisition has divided opinion among investors.
- Concerns have been raised regarding management's motives and the potential impact of the acquisition's valuation on future returns.
- ECP Asset Management is focused on the opportunities available to the combined entity.
- The investment thesis considers the consolidation occurring at the distributor and building products level.
Summary
QVG Capital
31 Mar 2025
$38.48
- QVG Capital identifies James Hardie as a key detractor due to recent fundamental news-flow.
- James Hardie announced a sizable acquisition of Azek, a US building products business.
- The acquisition has created a battleground stock atmosphere, with bears questioning the 37% acquisition premium.
- Bulls argue that the 18% fall in share price has already accounted for the premium.
- The $2.2bn USD premium corresponds to the market cap reduction in JHX.
- The combined business now trades on the same EBIT multiple as before (excluding synergies) but with a faster growth profile.
- It exhibits faster growth than the average industrial sector with a higher ROIC, yet does not trade at a premium.
- Concerns include a more levered balance sheet and a management team with a history of shareholder-unfriendly capital allocation.
- QVG Capital notes the attractive valuation metrics but is wary of management's unattractive behavior.
- The analogy of an Uber driver in a Lexus driving dangerously illustrates the disconnect between perceived value and actual performance.
Summary
Selector Funds Management
31 Mar 2025
$38.48
- Selector Funds Management updates their investment thesis on James Hardie Industries following the proposed acquisition of The AZEK Company for US$8.75 billion.
- AZEK shareholders will receive US$26.45 in cash and 1.0340 ordinary shares of James Hardie, to be listed on the NYSE.
- Post-acquisition, James Hardie and AZEK shareholders are expected to own approximately 74% and 26% of the combined business.
- Management anticipates the deal to close in the second half of CY25, pending regulatory and shareholder approval.
- Post-acquisition leverage ratio is projected at 2.8x, expected to reduce to 2x within twelve months.
- AZEK is a leader in low-maintenance outdoor living products with a focus on innovation and material conversion.
- The acquisition creates a leading exterior and outdoor living business, enhancing customer solutions.
- Combined annual sales are projected at US$6 billion with an adjusted EBITDA margin of 31%.
- Management expects to generate over US$1 billion in annual free cash flow for growth and share buybacks.
- Despite market polarization due to equity dilution concerns, the long-term outlook suggests accelerated growth and margin expansion.
- James Hardie currently holds a market capitalisation of $16 billion.
Summary
L1 Capital
31 Mar 2025
$38.48
- James Hardie shares fell 24% after announcing the acquisition of Azek, a leading U.S. decking manufacturer.
- The acquisition implies a 37% premium with a US$8.5b enterprise valuation.
- The deal is 53% scrip funded and 47% cash funded.
- Azek holds the second largest market share in the U.S. composite decking market and has a strong financial track record.
- The residential segment of Azek has seen a 15% CAGR in revenue over the last seven years.
- Prior to the deal, Azek traded at around 28x forward P/E, while James Hardie trades at ~18x forward P/E.
- The market reaction suggests that James Hardie may have overpaid for the acquisition, viewing it as dilutive to shareholder value.
- L1 Capital expresses disappointment with the Board's decision to proceed with the acquisition at an elevated valuation amid economic uncertainty.
- Despite the acquisition concerns, current valuation shows support at ~16x forward P/E, considering only cost synergies.
- Both Azek and James Hardie have a history of double-digit earnings growth, which may continue and potentially accelerate post-merger.
- The current valuation and growth trajectory is favorable compared to James Hardie’s average forward P/E of ~21x over the past decade and Azek’s average of 34x since 2020.
Summary
Blackwattle Investment Partners
31 Mar 2025
$38.48
- Blackwattle Investment Partners notes that James Hardie (JHX) has seen a 24% decline in stock performance, significantly impacting the fund's results in March.
- The decline is attributed to a self-inflicted wound related to JHX’s bid for AZEK, a leading provider in the composite decking market.
- Composite materials are gaining market share from wood due to their durability and low maintenance needs, indicating a strong potential for growth.
- Concerns regarding the acquisition include:
- High acquisition price: JHX paid around 36x PE for AZEK, compared to its own 18x PE.
- Questionable synergies: Of the estimated $350m in synergies, two-thirds are revenue synergies, which historically are hard to realize.
- Size of acquisition: The $8.75bn deal represents about two-thirds of JHX’s market cap, raising concerns about financial strain.
- Lack of shareholder vote: Despite significant scrip issuance, there is no vote required on the transaction.
- Additional worries: Concerns include increasing leverage during a weak US housing market and a potential move to Delaware for corporate governance.
- The market reacted negatively, with JHX’s market cap falling by approximately $2.25bn by the end of March, reflecting skepticism about the acquisition.
- The current consideration for AZEK has decreased to about $7.4bn, suggesting that the market is pricing in a lack of confidence in the projected synergies.
Summary
Bennelong Australian Equity Partners
31 Mar 2025
$38.48
- James Hardie announced the acquisition of Azek, a synthetic/composite decking supplier in the US known as TimberTech.
- Bennelong Long Short Equity Fund notes that James Hardie achieves excellent returns and growth from its legacy fibre cement business, dominating the fibre cement segment with a 90% market share.
- High returns, along with high organic growth and dominant market share, are rare attributes for businesses.
- Despite Azek's rapid growth, it operates in a more competitive segment, with lower returns than James Hardie.
- The fund believes that JHX's agreement to pay a high price for Azek dilutes the quality of their core business.
- This dilution creates a poor risk/reward trade-off for JHX shareholders.
- The market has reacted negatively to this acquisition, punishing JHX's stock for the perceived risks involved.
Summary
Airlie Funds Management
31 Mar 2025
$38.48
- Airlie Funds Management expresses concern over the value destruction from James Hardie’s acquisition of Azek.
- The acquisition tarnishes Hardie’s reputation as a high-returning organic growth story on the ASX.
- Consensus estimates predict EBIT of $865m for FY25 with a 32% pre-tax return on invested capital of $2.8bn.
- The invested capital reflects decades of investment in the North American Fibre Cement division and historic goodwill.
- The proposed US$8.75bn acquisition represents a 312% increase in Hardie’s capital base.
- Azek’s forecast EBIT of US$270m implies a 3% pre-tax return for shareholders.
- To achieve a 10-12% return, Azek would need to triple its EBIT to US$875m-1bn, which is deemed unlikely.
- Even with $125m in cost synergies, Azek’s EBIT base would be $395m, necessitating a purchase price of $3.3bn-$4bn for acceptable returns.
- The deal appears value destructive by US$4.5-5bn.
- Management's ability to achieve $500m in revenue synergies may offset some value destruction, but this is uncertain.
- James Hardie’s market cap has dropped from US$14bn to cUS$10bn, reflecting quick market response to value destruction.
- The future success of the acquisition will depend on execution and whether synergies exceed expectations.
- Airlie Funds Management emphasizes the need for management to avoid dumb deals in M&A.
Summary
Ten Cap
31 Mar 2025
$38.48
- James Hardie Industries (JHX) was the portfolio’s most significant contributor during the period.
- Ten Cap had a short position in JHX, based on a cautious stance regarding US housing.
- This stance was informed by a combination of industry feedback and macroeconomic data indicating endmarket weakness.
- Concerns were heightened by JHX's announcement of its acquisition of AZEK, a US-based decking business.
- The size of the transaction was unanticipated by Ten Cap.
- Ten Cap's positioning was influenced by observable signals such as the suspension of the share buyback program.
- There was also a noted increase in M&A-related recruitment activity.
Summary
Ten Cap
31 Jan 2025
$54.63
- Ten Cap has taken profits in James Hardie (JHX).
- Continued weakness in the US housing market due to higher mortgage rates has led to a reduction in their position.
- Despite admiring the quality of the business, they note that it is taking time for US housing activity to recover.
- They anticipate a better entry point as market expectations around inflation and housing demand stabilize.
Summary
Selector Funds Management
31 Dec 2024
$50.07
- Selector Funds Management continues to hold a positive view on James Hardie Industries plc due to its status as the global leader in manufacturing high-performance fibre cement siding.
- The company has a strong operational presence with around 5,000 employees and manufacturing across North America, Asia Pacific, and Europe.
- In its recent FY25 update, James Hardie reported that its North America and Australia Pacific divisions are outperforming end markets despite challenging macroeconomic conditions.
- Management expresses confidence that this outperformance will not only continue but will also accelerate in the future.
- CEO Aaron Erter emphasizes the superior value proposition of fibre cement over competitors such as vinyl and OSB, particularly regarding environmental resilience.
- James Hardie is focused on strengthening relationships with large U.S. home builders through the Contractor Alliance Program, which offers training and support.
- Marketing efforts are underway to enhance brand awareness and drive demand for higher-margin products.
- Capacity management strategies include both brownfield and greenfield initiatives to meet future demand.
- Ongoing cost control measures and efficiency gains are expected to improve margins and yield over the long term.
- North America continues to show strong results, with preparations for a market recovery anticipated as interest rates potentially decline.
- In the APAC region, effective execution has led to market share gains and operational savings, with expectations of solid results as end markets improve.
- While Europe faces challenges, particularly in Germany, management maintains a cautious optimism regarding specific products like Therm 32 flooring.
- Capital expenditure for FY25 is projected at US$420m-US$440m, reflecting strategic adjustments.
- James Hardie has approved a new $300m buyback program, following the completion of a previous buyback.
- The company is guiding for FY25 net income of US$635m with a North America EBIT margin of 29.3%.
- James Hardie’s market capitalization stands at $24.5b, with a manageable net debt to EBITDA ratio of 0.68x.
Summary
Oracle Advisory Group
31 Dec 2024
$50.07
- Oracle Advisory Group continues to hold an optimistic view on James Hardie (JHX).
- Despite interest rate expectations, the US economy remains strong.
- The potential for higher for longer interest rates due to trade tariff concerns is recognized.
- James Hardie is highly geared to the US housing market, impacting its recent performance.
- US housing starts are at consistent levels with 2018-19, indicating a potential recovery.
- Expect mortgage rates to moderate, aiding recovery in the housing market.
- Given the attractive valuation, Oracle Advisory Group has increased their weight in James Hardie.
- James Hardie is considered one of the best companies in the housing sector.
Summary
ECP Asset Management
30 Nov 2024
$56.31
- James Hardie Industries PLC (JHX) had a positive contribution this month.
- FY25 guidance was lowered due to ongoing pressures in housing demand across North America and Europe.
- A 5% decline in Q2 net sales was offset by cost savings and higher selling prices.
- Company delivered a 29% EBIT margin at the top of guidance.
- Supported by US housing undersupply and renovation demand.
- Innovative products and strong market position bolster long-term strategy.
- Company announced a $300m share buyback through October 2025, underscoring confidence in prospects.
Summary
Blackwattle Investment Partners
30 Nov 2024
$56.31
- James Hardie Industries (JHX) contributed positively to Fund performance last month.
- Reported steady revenues in Asia Pacific and European operations due to robust pricing.
- In North America, demonstrated good cost discipline and margin management despite a 5% revenue decline.
- Chronic underbuild of new housing in the US supports long-term growth.
- Continued market share gains for fibre cement against vinyl and other substrates.
- Confidence in JHX’s dominance in fibre cement products enhances growth outlook.
- Anticipation of interest rates normalising bolsters long-term growth prospects.
- Average adjusted return on capital employed of 45% over the last 5 years indicates potential for significant shareholder value creation.
Summary
Blackwattle Investment Partners
31 July 2024
$54.67
- James Hardie (JHX.AX) reversed from a significant detractor to a large contributor to Fund performance in July, gaining +16%
- Previous concerns included weaker demand from the US repair and remodel market, higher input costs, and elevated operating expenses
- The prospect of a US rate cut is expected to spur housing activity, renewing interest in James Hardie and similar homebuilder stocks
- Blackwattle Investment Partners remains confident in the long-term prospects for JHX
- Strong pricing power and market share gains against alternative siding materials, such as vinyl, support this confidence
Summary
ECP Asset Management
31 July 2024
$54.67
- James Hardie Industries PLC (JHX) was a key contributor this month, despite no specific company news.
- JHX is the leading producer of fibre cement siding, commanding ~90% market share in the US.
- With a strong market position, pricing power, and high returns on capital, JHX is a standout in the building products sector.
- Despite some intermittent US housing market weakness, JHX's dominant position and innovative product range position it well for continued growth.
- ECP Asset Management continues to hold because of these favorable attributes.
Summary
Airlie Funds Management
30 June 2024
$47.92
- James Hardie (ASX: JHX) downgraded expectations for FY25 earnings due to softness in North American repair and remodelling spending.
- Higher mortgage rates have slowed US housing market activity, impacting James Hardie as a manufacturer of fibre cement siding.
- Despite current challenges, the long-term structural opportunity in North America remains intact, with potential for market share growth in an undersupplied housing market.
- Airlie Funds Management's perspective was reinforced during the company's recent North American investor day.
- The through-the-cycle return on capital for James Hardie is considered strong (>25%).
- The company boasts a robust balance sheet with less than 1x leverage.
- Management quality is regarded as high.
- Airlie Funds Management continues to hold and add to the position on weakness, viewing James Hardie as a core long-term holding in the portfolio.
Summary
Equity Trustees Asset Management
30 June 2024
$47.92
- Equity Trustees Asset Management acknowledges the impact of cyclical weakness in the US housing market on JHX.
- The share price decline was influenced by a weaker than expected result and guidance.
- Despite recent challenges, the long-term outlook for JHX remains attractive.
- The company hosted an investor tour in the US, highlighting plans to capture market share.
- Equity Trustees Asset Management views JHX as a high-quality stock with a superior product.
- The firm believes in JHX’s strong balance sheet and long-term growth opportunities.
Summary
Oracle Advisory Group
30 June 2024
$47.92
- James Hardie’s (JHX) 4th Quarter FY24 results were modestly below expectations
- FY25 guidance fell well below market expectations
- Ongoing slowdown in the US linked to high interest rates
- Consumers are delaying repair and remodelling spending
- Portfolio impact remains modest due to previous weight trimming
- Oracle Advisory Group is keen to hold James Hardie through the cycle
- Positive outlook for the eventual housing upturn
Summary
Selector Funds Management
30 June 2024
$47.92
- Selector Funds Management continues to hold a positive view on James Hardie Industries plc (JHX) as it remains the global leader in high-performance fibre cement siding.
- Outperforming End Markets: JHX's North America and APAC divisions are outperforming in challenging macro environments, despite a weaker European business.
- Management Confidence: CEO Aaron Erter expresses confidence in sustained outperformance and future acceleration due to fibre cement's superior value proposition.
- Strategic Focus: JHX is enhancing relationships with large U.S. home builders and implementing a Contractor Alliance Program to support distributors.
- Brand Awareness: The company is ramping up marketing efforts to drive demand, focusing on higher-margin products.
- Capacity Management: JHX is prepared to manage capacity through brownfield and greenfield initiatives, adjusting capital expenditure to demand.
- Cost Control: A clutch and pedal strategy is in place to maintain cost efficiency and improve margins.
- Regional Performance: North America shows strong results and is investing for future growth; APAC is focused on innovation and efficiency gains.
- European Challenges: Europe remains a small revenue contributor, and strategies are being reassessed for better alignment with market needs.
- Capital Expenditure Outlook: FY25 capital expenditure is projected at US$420m-US$440m, with ongoing share repurchase programs supporting shareholder value.
- Market Share Gains: JHX continues to capture market share from alternative siding solutions, with fibre cement's share of primary cladding increasing significantly.
- Long-term Aspirations: The company aims to double the number of homes sided with fibre cement by 2035 and tripling adjusted EBITDA over the long term.
Summary
Blackwattle Investment Partners
30 Apr 2024
$54.21
- Blackwattle Investment Partners notes a 12% decline in the fund's position in James Hardie (JHX) over the past month.
- The rise in the US 10-year bond yield to 4.6% has resulted in higher 30-year mortgage rates reaching 7.2%, the highest since 2009.
- This increase in mortgage rates is expected to dampen new home construction and renovation markets temporarily.
- Nevertheless, there are signs of pent-up demand due to a 3 million home shortfall in the USA since the GFC.
- The aging housing stock, with 35% built pre-1969 and 14% pre-1979, indicates a future need for new siding.
- As rates ease, an upturn in activity for James Hardie is anticipated.
- Rising input costs are a concern but are viewed as a short-term headwind.
- James Hardie’s scale and trusted brand status may provide a high degree of pricing power as an offset to these costs.
- Blackwattle Investment Partners prefers to use market volatility to adjust their position size based on intrinsic value assessments.
- Investor focus on short-term quarterly results is seen as an opportunity for long-term investors.
Summary
Airlie Funds Management
31 Dec 2023
$56.88
- Airlie Funds Management reports a strong quarter for the portfolio, led by James Hardie (+38%).
- The positive performance followed a better-than-expected 2Q result in November.
- There is optimism about the earnings potential of James Hardie as market volumes are expected to return.
- Demand in the US repair and remodel segment is described as a “beach ball being held underwater”.
- The US housing market faces similar challenges to Australia, with strong pent-up demand and high affordability issues.
- Unlike Australia, the US has a greater ability to supply new homes when affordability improves.
- Other portfolio holdings, such as Reece (+20%) and CSR (+17%), also benefited from the resilience of both the US and Australian housing markets.
Summary
Airlie Funds Management
30 Sept 2023
$40.70
- James Hardie is a key holding in the portfolio of Airlie Funds Management.
- Approximately 70% of the company’s earnings come from its U.S. business.
- Meetings with D.R. Horton (key customer) and Louisiana Pacific (key competitor) provided insights into the current demand environment.
- Overall, repair and remodel activity in the U.S. remains weak due to low turnover of existing home inventory.
- Most renovations occur when buying existing homes, which is currently limited by low inventory churn.
- Despite this, demand for new homes is surprisingly resilient due to overall supply shortages in the U.S.
- James Hardie supplies 24 of the top 25 U.S. homebuilders, including an exclusive supply arrangement with D.R. Horton.
- D.R. Horton is the largest builder of new homes in North America.
- James Hardie continues to trade below its long-run earnings multiple, making it attractive to Airlie Funds Management.
- Management has demonstrated the ability to navigate the cycle effectively.
Summary
L1 Capital
30 Sept 2023
$40.70
- James Hardie (Long +17%) shares rose after announcing first quarter earnings well above market expectations.
- Strong second quarter earnings guidance has contributed to investor confidence.
- L1 Capital continues to hold due to share price exposure built on weakness earlier in the quarter.
- Portfolio benefited from a 17% share price rise during the period held.
- Despite uncertainty regarding rising interest rates and their impact on housing and remodeling demand, the outlook remains positive.
- Company maintains strong operating margins even with potential declines in fibre cement volumes.
- This resilience is attributed to diverse end-market exposure, product mix shift towards higher-margin products, and proactive cost management.
Summary
L1 Capital
30 June 2023
$39.75
- James Hardie (Long +25%) shares rose following Q1 FY23 earnings guidance exceeding market expectations.
- Uncertainty remains regarding the impact of rising interest rates on housing and repair/remodel demand.
- The company expresses confidence in maintaining strong operating margins despite potential declines in fibre cement volumes.
- This resilience is attributed to more stable end-market exposure and a higher-margin product mix.
- Proactive cost management initiatives further support their operational stability.
- L1 Capital believes James Hardie is well positioned to navigate current softer demand and expects continued growth at an above-market rate for years.
Summary
L1 Capital
31 May 2023
$37.89
- James Hardie (Long +13%) shares rose after announcing Q1 FY23 earnings guidance well above market expectations.
- Uncertainty remains regarding the impact of rising interest rates on housing and repair/remodel demand.
- Company confidence in maintaining strong margins despite expected decline in fibre cement volumes.
- Driven by resilient end-market exposure, product mix shifting towards higher-margin products, and proactive cost management.
- L1 Capital continues to believe James Hardie is well placed to manage through current softer demand and achieve above-market growth for years to come.
Summary
L1 Capital
31 Jan 2023
$31.45
- James Hardie (Long +19%) shares rose due to improved housing sentiment.
- U.S. homebuilders reported a sharp increase in new housing demand in January.
- U.S. 30-year fixed mortgage rates eased to around 6% after peaking above 7% in November 2022.
- Market leader in fibre cement siding, James Hardie has grown its market share in the U.S. for over 20 years.
- The business mix has evolved, with ~65% of revenues from repair and remodel and ~35% from new housing.
- L1 Capital believes James Hardie is well placed to manage softer new housing demand and grow at an above-market rate for many years.
Summary
L1 Capital
30 Sept 2022
$30.84
- L1 Capital notes that James Hardie (Long -8%) shares have declined due to expected sharp correction in U.S. housing demand.
- 30-year fixed mortgage rates have increased by 100bps to nearly 7%, raising fears of a U.S. recession.
- James Hardie remains market leader in fibre cement siding with over 20 years of market share growth in the U.S.
- The business mix has evolved, with approximately 65% of revenue from repair and remodel exposure and 35% from new housing.
- L1 Capital attended the company’s investor day in New York and held meetings with senior management, revealing confidence in James Hardie's market share growth and business resilience.
- The current market correction presents an opportunity to invest in a high-quality company with significant structural growth potential.
- James Hardie trades at a FY23 consensus P/E of ~13x, compared to its long-term average of 20-25x.
- L1 Capital believes the market assumptions imply a ~40% decline in earnings, akin to the GFC impact, although the current business mix is less cyclical.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
In a landscape where fear reigns, James Hardie appears poised to defy the odds. With a resilient business model and a valuation that suggests a dire outlook, this market leader could be the diamond in the rough for investors seeking long-term growth.
Last Updated: 03 Nov 2025
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Frequently Asked Questions
Who is investing in James Hardie Industries plc (ASX:JHX)?
Fund managers including L1 Capital, Ten Cap, Bennelong Australian Equity Partners, Blackwattle Investment Partners, Greencape Capital, Oracle Advisory Group, Equity Trustees Asset Management, Airlie Funds Management, QVG Capital, Wilson Asset Management, First Sentier Investors, ECP Asset Management, Selector Funds Management, Infinity Asset Management, Seneca Financial Solutions, Pendal Group, Antares Capital, DS Capital, Kardinia Capital, Yarra Capital Management and Perennial Partners have invested in James Hardie Industries plc (ASX:JHX).
Why do fund managers invest in James Hardie Industries plc?
Fund managers are investing in James Hardie Industries plc due to its strong market position as a leader in fibre cement siding, with a proven track record of market share growth in the U.S. Despite recent declines in share price linked to rising mortgage rates and recession fears, the company's revenue mix—65% from repair and remodel and 35% from new housing—provides resilience against market fluctuations. Fund managers view the current valuation, trading at a P/E of ~13x compared to a historical average of 20-25x, as attractive, especially given the potential for long-term structural growth. They believe the market is overestimating the impact of housing market corrections on earnings, positioning James Hardie as a high-quality investment opportunity.
What happened to James Hardie Industries plc (ASX:JHX)?
Fund managers have expressed a cautious outlook on James Hardie Industries plc (JHX) due to recent poor financial performance and macroeconomic challenges. The company's Q1 results significantly missed expectations, driven by decreased sales in North America and increased leverage from the AZEK acquisition. Concerns over a soft housing market, customer destocking, and an elevated debt position have led several fund managers to exit their positions. However, some remain optimistic about JHX's long-term potential, citing its strong market position and opportunities for revenue synergies as housing conditions improve.