After its AZEK debacle last year, James Hardie 2.0 is up +20% YTD

James Hardie (ASX:JHX) has officially entered a new ‘2.0’ period, shaking off its CY25 doldrums following the $14 billion acquisition of U.S.-based-peer AZEK (that deal went ahead skirting shareholder approval).

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As of Wednesday lunchtime, YTD returns in JHX are coming in at over +20%. In its earnings, the company stated AZEK is, in fact, boosting sales.

Shares were +13.5% higher, and perhaps most noteworthy – while this was the case well before Wednesday’s earnings release – shorts on the company have cratered from their 10% mark in November last year.

The longevity of optimism that AZEK’s contribution can engender in investors remains to be seen. What sales contribution AZEK did account for was fairly small on the whole and was even offset by declines in other product categories.

But, for a massive deal equal to JHX’s market cap at $14B (contemporaneously), and one that was done without the need for mass shareholder approval, appears not have been the worst decision in the world.

But maybe more important for the Wednesday market reaction is that EBITDA clocked in at US$330M, +6% above analyst expectations. That’s always a good thing, and it’s sobering to see a stock act volatile because of fundamentals, not despite them.

The company also upgraded its outlook, though it noted that strength across different building product categories would be mixed. Full year guidance has been increased from US$1.2-$1.25B to US$1.23-$1.26B.

“We are taking actions to address the current market environment, including optimising our manufacturing footprint and better aligning our cost structure with the slower, but stabilising, pace of demand,” JHX CEO Aaron Erter said.

He added the company remains ‘confident’ in its combination with AZEK.

JHX last traded at $37.60.

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