JHX +14.38%: Produced a material beat versus expectations at their 1Q24 result today exposing the many drivers they have across their business to cope with operational challenges. While top-line sales were ‘only’ ~4% ahead at the group level, cost management was impressive and that drove a big beat on margins and thus quarterly earnings. To put this achievement into context, their Nth American business did >30% margins on volumes that were down ~9% which provides a great read-through for when utilisation rates go up again. They guided to Q2 profit of $170-190m versus the consensus of $156m, which is a 15% upgrade, however, we would caution that this is a quarterly update, and while it’s impressive, they have not provided guidance past Q2.
- We sold JHX too early (clearly) ~$40, but we are unlikely to chase strength.
MM in neutral JHX ~$46.50
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