JHX surged +4.3% on Thursday as it embraced the interest rate implications of Jerome Powell’s speech, i.e. lower bond yields are a bullish tailwind for the construction industry. We believe the risk/reward toward JHX now is attractive following the stocks -21% correction assisted by the encouraging rhetoric from the Fed. Remember, JHX delivered an excellent result in August, which suggests the company is extremely well-positioned when bond yields stop rising or even fall – this could be happening right now.
- We are confident that JHX will test $43, but similar to the ASX, it will probably need bond yields to decline to challenge its 2023 high.
MM is bullish toward JHX in the short-term
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