Jefferies on Wednesday raised its price target on James Hardie Industries to AUD33.00 from AUD30.00, while retaining a Buy recommendation. The broker pointed to the company’s latest quarterly results as the catalyst for the move, citing particularly robust siding performance that helped margins surpass expectations.
The shares are trading around $26.21, reflecting a 4.01% gain over the past week and a 17.49% advance year-to-date. According to available market data, three analysts have recently revised their earnings estimates higher for the upcoming period.
In fiscal third-quarter 2026 results, James Hardie reported EBITDA of $330 million and earnings per share of $0.24, exceeding consensus EBITDA expectations of $310 million and roughly meeting EPS projections of $0.23. Revenue for the quarter came in at $1.239 billion, above the Street estimate of $1.211 billion. On a trailing-12-month basis, revenue stands at $4.4 billion, representing growth of 12.59%.
Margins for the quarter were stronger than analysts had forecast, with an adjusted margin of 26.6% versus Street expectations of 25.6%. Jefferies highlighted that the margin outperformance was "encouragingly driven by siding." This quarter marks James Hardie’s second consecutive period in which it both beat expectations and raised guidance.
Following the quarter, the company lifted its fiscal 2026 outlook. New guidance for Siding and Trim sales ranges from $2.953 billion to $2.998 billion, up from a prior range of $2.925 billion to $2.995 billion. Guidance for DR&A sales was increased to $787 million to $800 million, versus an earlier $780 million to $800 million range. The company also nudged its EBITDA guidance higher to $1.232 billion to $1.263 billion from a previous $1.20 billion to $1.25 billion, a range that sits slightly ahead of consensus estimates of $1.232 billion.
Jefferies characterized James Hardie as "one of the most dislocated names" in its coverage and included it among its top picks. The broker’s upgraded target follows the company’s string of positive operational results and the upward drift in guidance.
Separately, another set of reported Q3 figures included somewhat different point estimates: an EPS of $0.26 versus a forecast of $0.22, representing an 18.18% surprise, with revenue reported at $1.29 billion against expectations of $1.21 billion. In response to the quarter, Truist Securities raised its price target on the stock to $30.00 from $28.00, maintaining a Buy rating and describing the quarter as "modestly above" Street expectations.
Despite the upbeat operational picture and broker support, valuation remains a notable consideration. Market-level metrics show the stock trading at a price-to-earnings multiple of 65.02, a level the report characterizes as high relative to its assessed Fair Value, suggesting potential overvaluation risks for investors weighing the recent rally.
Key takeaways
- Jefferies raised its price target on James Hardie to AUD33.00 and maintained a Buy rating after Q3 results beat EBITDA and sales estimates and margins were stronger than expected.
- The company raised fiscal 2026 guidance for Siding & Trim sales, DR&A sales, and EBITDA, with the updated EBITDA range slightly ahead of consensus.
- Truist Securities also increased its price target to $30.00 and kept a Buy rating, describing the quarter as modestly above expectations.
Context and market signals
The quarter’s upside was driven by siding activity, which helped lift margins and enabled management to increase full-year guidance. Multiple brokers responded with higher targets, reflecting improved near-term earnings visibility. However, the elevated P/E multiple highlights a tension between operational momentum and valuation.
Risks and uncertainties
- Valuation risk - The company is trading at a P/E of 65.02, which the analysis identifies as high compared with its Fair Value; this suggests downside risk if earnings fail to keep pace with expectations.
- Concentration of margin drivers - The quarterly margin beat was notably "driven by siding," indicating that performance concentrated in a single product category could introduce variability if that segment slows.
- Guidance reliance - While management raised guidance for fiscal 2026, changes to market demand or input-cost dynamics could affect the company’s ability to sustain the upgraded outlook.
Investors and industry observers will likely monitor subsequent quarterly updates for confirmation that the siding-driven margin strength is durable and that the company can convert upgraded guidance into realized results.