James Hardie Industries PLC (ASX: JHX) shares are sliding today.
Shares in the S&P/ASX 200 Index (ASX: XJO) building materials company closed yesterday trading for $30.92. In early afternoon trade on Tuesday, shares are changing hands for $30.12 apiece, down 2.6%.
For some context, the ASX 200 is down 0.6% at this same time.
Unfortunately for faithful shareholders, today's underperformance is par for the course this past year, with shares down a sharp 43.8% in 12 months.
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Why have James Hardie shares gotten hammered?
Much of the carnage can be pinned on the company's decidedly underwhelming first-quarter FY 2026 results, reported on 20 August.
James Hardie shares closed down a painful 27.8% on the day and dropped another 9.4% the following day.
Investors clearly got the jitters amid a 9% decline in Q1 FY 2026 net sales to US$899.9 million.
And earnings before interest, taxes, depreciation and amortisation (EBITDA) declined by 21% year on year to US$225.5 million.
Then there was the disappointing guidance management provided for full year FY 2026. The company said it expects full-year adjusted EBITDA will be in the range of US$1.05 billion to US$1.15 billion.
That implies either sluggish growth or a decline from the adjusted EBITDA of US$1.1 billion achieved in FY 2025.
But having analysed these results, the team over at Macquarie Group Ltd (ASX: MQG) believe James Hardie shares are now well-placed to outperform into 2026.
Why Macquarie expects a big rebound for the ASX 200 stock
Macquarie was less than impressed with James Hardie's first-quarter report and FY 2026 guidance.
"The result, and the FY26 outlook adjustment, was a shock," the broker noted.
"However, we think the base has been laid," Macquarie added.
According to the broker:
The AGM should bring better alignment, the market is stabilising … and earnings expectations point to some capitulation – we see a doubling in EBITDA by FY30 (from FY26) and NPAT ~6% above consensus in FY27.
Macquarie also expects James Hardie shares to catch some tailwinds from an improving macroeconomic perspective.
Macquarie said:
Macro context has been unsupportive, but uncertainty amongst US consumers is easing, and we see the Fed cutting three times (Sep, Oct and 2QCY26). This should aid variable rate lending products (key for R&R) and ease mortgage spreads.
The offsetting risk to inflation expectations could soften the feed-through to mortgage rates, but big builder buydowns are likely a structural support.
The broker also cited James Hardie's acquisition of Azek, a United States-based decking and exterior building products manufacturer, on July 1 as a positive development.
Connecting the dots, Macquarie maintained its outperform rating on James Hardie shares and increased its 12-month price target to $37.20 a share (up from $36.90).
That represents a potential upside of 23.5% from current levels.
