James Hardie Industries plc (JHX): A Bull Case Theory

We came across a bullish thesis on James Hardie Industries plc on Directionally Correct Research’s Substack by Will Powers. In this article, we will summarize the bulls’ thesis on JHX. James Hardie Industries plc's share was trading at $28.08 as of July 1^st. JHX’s trailing and forward P/E were 27.44 and 22.37 respectively according to Yahoo Finance.

James Hardie Industries (JHX), a dominant player in fiber cement siding, announced a transformative $8.75B cash-and-stock acquisition of composite decking company AZEK, triggering a ~25% stock drop amid investor backlash over deal structure, high 21x EBITDA multiple, and absence of a shareholder vote.

While the price appears steep and the integration complex, prospective buyers can now access the combined entity at a more reasonable 13.5x pro-forma EBITDA. The merged company, with 75% exposure to the resilient U.S. repair and remodel (R&R) market, is expected to grow revenue high single to low double digits annually, maintain low-30% EBITDA margins, and drive mid-to-high teens free cash flow per share growth.

If cost and commercial synergies—targeted at $125M and $225M respectively—are even partially realized, the combined JHX|AZEK entity could deliver over $2.1B EBITDA by FY 2028, valuing the stock at ~$44/share for a low-20s% IRR, with further upside if the market re-rates it even slightly. AZEK complements JHX’s U.S. exposure, with both companies focused on R&R, though their products and manufacturing processes are materially different, limiting near-term cost synergies.

The more ambitious commercial synergies hinge on convincing distributors and contractors to cross-sell unrelated siding and decking products—an executional challenge that will require validation. Until synergy realization becomes evident through improving margins or revenue growth, a starter position is advised.

Despite macro risks, leverage concerns, and integration uncertainty, JHX’s strong core business, declining capex, and normalized growth profile present a compelling opportunity for long-term investors willing to stomach short-term volatility and monitor execution closely.

Previously we covered a bullish thesis on James Hardie Industries plc (JHX) by Will Powers in June 2025, which highlighted the AZEK acquisition, synergy potential, and strong R&R market exposure. The company’s stock price has appreciated approximately 9% since our coverage. The thesis still stands as synergy realization remains key. Will Powers shares an identical view but emphasizes near-term execution and disciplined position sizing.

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Disclosure: None. This article was originally published at Insider Monkey.