James Hardie Industries plc

L1 Capital Long Short Fund continues to hold James Hardie Industries despite recent share price weakness, which was driven by concerns over a slowdown in U.S. housing demand due to rising mortgage rates and recession fears. James Hardie, a market leader in fibre cement siding, has evolved significantly since the GFC, with a more resilient business mix: approximately 65% of revenues now come from repair and remodel, and 35% from new housing. While U.S. housing starts are expected to decline in the short term due to higher interest rates, L1 Capital remains confident in James Hardie’s ability to grow market share over the long term, especially given its strong competitive position. The market correction has created an opportunity to invest in a high-quality company at an attractive valuation, trading at a FY23 P/E of ~13x, well below its long-term average of 20-25x. L1 Capital believes the current valuation reflects a significant decline in earnings that is unlikely given the company’s more diversified revenue base and long-term growth prospects.

L1 Capital Long Short Fund continues to hold its position in James Hardie Industries following a 19% increase in share price. The growth in housing sentiment, driven by a sharp rise in new housing demand and a decline in U.S. 30-year fixed mortgage rates, has supported the company’s outlook. James Hardie, the market leader in fibre cement siding, has been increasing its market share in the U.S. for over 20 years. The business has shifted significantly since the Global Financial Crisis, with approximately 65% of its revenue now coming from repair and remodel activities, and 35% from new housing. Despite expectations of softer new housing demand in the near term, L1 Capital believes that James Hardie is well-positioned to navigate these conditions and continue growing at an above-market rate over the long term.

L1 Capital Long Short Fund continues to hold its position in James Hardie Industries following a 13% rise in shares after the company announced Q1 FY23 earnings guidance well above market expectations. Despite uncertainty surrounding the impact of rising interest rates on housing and demand for repair and remodel products, James Hardie has provided reassurance that it can maintain strong margins, even with a potential decline in fibre cement volumes. The company’s more resilient end-market exposure, shift towards higher-margin products, and proactive cost management are expected to support its performance. L1 Capital remains confident in James Hardie’s ability to navigate the current period of softer demand and continue to grow at an above-market rate over the long term.

L1 Capital Long Short Fund continues to hold James Hardie Industries plc due to the company's strong position despite uncertainties in the housing and repair sectors. Shares rose after the company announced Q1 FY23 earnings guidance significantly above market expectations. While rising interest rates may impact housing and repair demand, James Hardie remains confident in maintaining strong operating margins. This is supported by its shift towards higher-margin products and proactive cost management. L1 Capital believes that James Hardie’s resilient end-market exposure positions the company well to navigate current soft demand conditions, with significant potential for above-market growth in the years to come.

L1 Capital Long Short Fund continues to hold its position in James Hardie Industries, following a strong 17% rise in share price after the company reported first-quarter earnings well above market expectations, along with positive second-quarter earnings guidance. The fund benefited from acquiring exposure during share price weakness earlier in the quarter. While uncertainty remains around the potential impact of rising interest rates on housing and repair/remodel demand, James Hardie has provided confidence in its ability to maintain strong operating margins, even in the face of a potential decline in fibre cement volumes. This resilience is supported by the company's more stable end-market exposure, a shift towards higher-margin products, and a proactive cost management program. These factors bolster L1 Capital's continued conviction in the company's ability to weather market volatility and maintain growth.

Alpha Plus has updated its investment thesis on James Hardie Industries plc (JHX), choosing to reduce its position and take profits amid ongoing softness in the U.S. housing market. The fund manager cited elevated mortgage rates as a key factor weighing on housing activity, which in turn influenced the decision to trim exposure. While Alpha Plus continues to view James Hardie as a high-quality business, the near-term macro environment presents headwinds. The fund manager anticipates a more attractive entry point as inflation expectations settle and housing demand begins to normalise.

Alpha Plus has updated its investment thesis on James Hardie Industries (JHX), maintaining a cautious stance and continuing to hold a short position. This view has been shaped by persistent signs of weakness in the U.S. housing market, supported by both industry feedback and broader macroeconomic indicators. The announcement of JHX’s acquisition of AZEK, a U.S.-based decking company, reinforced Alpha Plus' concerns, particularly given the size of the deal, which exceeded market expectations. While the acquisition itself was not forecast, Alpha Plus had identified early indicators of strategic shifts, such as the suspension of JHX’s share buyback program and increased hiring activity related to mergers and acquisitions. Given these signals and the ongoing softness in end markets, Alpha Plus continues to hold its short position, viewing the recent developments as consistent with its broader outlook on the sector.