Why the James Hardie share price has ‘fallen far enough’: fundie

The James Hardie share price has suffered this year. Has its fall presented a buying opportunity?

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Key points

  • The James Hardie share price has fallen nearly 50% so far this year to trade at $28.65 on Friday
  • Experts are tipping the end of the stock's suffering to come soon, believing its sell-off has presented a buying opportunity
  • They reportedly like the building materials company's financial year outlook and long-term potential in the US housing market

The James Hardie Industries Plc (ASX: JHX) share price has nearly halved since the start of 2022 and some fundies believe the bottom is nigh.

They’re hopeful for the building materials company’s future, noting it’s a buy in their eyes.

At the time of writing, the James Hardie share price is $28.65, 4.56% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently down 2.08%.

Let’s take a closer look at what’s got experts bullish on the James Hardie share price.

Why experts think the James Hardie share price is a buy

The James Hardie share price has been hammered this year. In fact, it plunged to its lowest point in almost two years – $28.62 – this morning.

But its decline has reportedly presented a strong buying opportunity, according to fundies.

Perpetual’s Anthony Aboud recently told Livewire the company’s stock has tumbled due to pressure from rising mortgage costs in the US and shifts in management.

However, the company’s current price and financial year 2023 guidance has piqued Aboud’s interest and sees him rating the stock a buy.

James Hardie is expecting to report between US$740 million and US$820 million of income next financial year. That would represent an increase of at least 19% on that of financial year 2022 (ended 31 March).

Meanwhile, Clime Investment Management’s Will Riggall told the Australian Financial Review the company has historically performed well in both good and bad times.

Thus, while the US housing market might be hit by rising interest rates in the short term, demand for James Hardie’s products should be supported over the long term.

Riggall also reportedly noted the company’s business is “less cyclical” than it has previous been, mostly due to greater earnings from US housing repairs and remodels.

Finally, a similar sentiment has been expressed by Sage’s Sean Fenton. The portfolio manager told Livewire the James Hardie share price looks like a buy at its current level.

“At the end of the day, it’s a quality business, which is growing its share of the siding market,” Fenton said.

“It’s fallen far enough now that, particularly in that growth part of the market for a business of that quality, it looks good value.”

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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