James Hardie (JHX) Soars 7.1%: Is Further Upside Left in the Stock?

James Hardie Industries plc JHX shares rallied 7.1% in the last trading session to close at $27.59. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 12% gain over the past four weeks.

James Hardie shares rose, likely driven by bullish sentiment following a new “outperform” rating from William Blair, which set a $33 price target. The firm highlighted James Hardie’s strong position in the high-growth siding and composite decking markets, projecting annual sales growth of 10–12% and EBITDA growth of 12–15%. Investor sentiment was probably further lifted by the company’s recent acquisition of The AZEK Company, a move expected to create a scaled, profitable platform for exterior and outdoor living products, driven by top-tier brands and accelerating the shift toward more durable building materials.

This fiber cement maker is expected to post quarterly earnings of $0.37 per share in its upcoming report, which represents a year-over-year change of -9.8%. Revenues are expected to be $972.33 million, down 2% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For James Hardie, the consensus EPS estimate for the quarter has been revised 5.1% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on JHX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

James Hardie is a member of the Zacks Building Products - Miscellaneous industry. One other stock in the same industry, Knife River (KNF), finished the last trading session 1.6% higher at $82.77. KNF has returned -13.4% over the past month.

For Knife River, the consensus EPS estimate for the upcoming report has changed -7% over the past month to $1.41. This represents a change of +2.9% from what the company reported a year ago. Knife River currently has a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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