The manufacturer of building products generates over 70% of its sales from North America and despite having upgraded FY22 guidance in February the stock finds itself plumbing new 52 week lows, down ~30%. Concern around the impact of rising interest rates on building product demand is one issue, however, they’re also undertaking large capital works at a number of their US plants in an inflationary environment forcing them to increase Capex expectations.
On an Est P/E of 19x JHX is trading at a 12% discount to its 5-year average, while using company stated guidance for FY23, profits are expected to grow by ~25% next year.
MM has added JHX to our Hit List, with interest ~$40
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