This month’s 3Q24 trading update from JHX was solid with net profit after tax (NPAT) of $US180m, a ~5% beat to consensus; however, the guidance for Q4 was essentially a 7% downgrade, which saw the stock trade lower earlier in the month before recovering. Importantly, sales growth was forecasted in line with expectations, and the stock looks well positioned moving forward for when rate cuts aid consumer affordability. The company and stock have performed strongly over the last year, but we continue to believe the stock is fully valued above $60, especially from a risk/reward perspective when we take into consideration the proportion of their earnings generated in the US, a higher AUD would become a headwind.
- We like JHX, but it’s not exciting at current levels, i.e. more of an old-fashioned hold as opposed to a buy.
MM is neutral JHX around $60
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