JHX +13.76%: the building products company posted an inline 2Q update today, though shares surged to 2-month highs on strong guidance. NPAT of $US179m was as expected, EBIT was a small miss at $US240m mostly on R&D and corporate costs but margins were strong thanks to successful cost control elsewhere. The company said 3Q earnings were expected to come in at $US165-185m, a huge $US40m beat to consensus driven by market share gains and higher margins. James Hardie has worked on reducing input costs, helped by falling freight costs, which is driving operational leverage. If this run rate can continue through the rest of the year, JHX could produce FY24 NPAT ~10% ahead of consensus expectations. Shareholders also enjoyed the new $US250m buyback – a top update overall and shows the business is accelerating.
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Performance update for March, stocks that drove returns & our current positioning
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Friday 26th April – ASX200 -101pts, Newmont (NEM), Resmed (RMD) & Super Retail (SUL)
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Market Matters Research Lead Shawn Hickman with David Koch
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MM is bullish JHX
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