If you are looking for an ASX 200 share to buy, then it could be worth considering the blue chip in this article.
That's because the team at Morgans believes it could be seriously undervalued at current levels and is tipping major upside over the next 12 months.
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Which ASX 200 share?
The share that Morgans is positive on is James Hardie Industries plc (ASX: JHX). It is a global leader in high-performance fibre cement building materials.
In case you missed it, earlier this week James Hardie released its FY 2026 results and reported net sales of US$4.84 billion. This was up 25% from US$3.88 billion in FY 2025.
However, it is worth highlighting that this was largely supported by the contribution from the AZEK acquisition. On an organic basis, James Hardie's net sales declined 2% for the year.
Management advised that full-year exterior product volumes fell high single digits, with single-family volumes down low double digits as softer construction conditions weighed on demand.
This ultimately led to statutory net income falling 75% to US$104 million, compared with US$424 million in FY 2025.
James Hardie's CEO, Aaron Erter, was pleased with the "transformational" year. He said:
Fiscal 2026 was a transformational year for James Hardie, highlighted by the closing of the AZEK acquisition. As we integrate the businesses, we are seeing continued progress across both cost and commercial synergies, further strengthening our belief in the long-term value creation opportunity from the combination. For the full fiscal year, we delivered solid financial performance despite a challenging operating environment. Despite our markets declining mid-to-high single digits for the year, our organic net sales declined just 2% year over year.
Should you invest?
As mentioned at the top, after reviewing its results, Morgans thinks the ASX 200 share could be undervalued at current levels.
It has put a buy rating and $39.00 price target on its shares. Based on the current James Hardie share price of $28.95, this implies potential upside of 35% for investors over the next 12 months.
Commenting on its recommendation, Morgans said:
FY26 result was in line with Consensus (and a slight beat vs prior guidance), while Consensus for FY27 was at the top end of guidance. To this end, the company is forecasting FY27 pro forma growth of 4-8%, with siding back to organic growth. Market conditions remain subdued, citing lower builder activity and affordability pressures – looking forward management assumes no market recovery in FY27.
As such, FY26 can be chalked up as a transformational but financially dilutive year, while FY27 is about margin and cash-recovery driven by synergies rather than any improvement in the housing market. Buy retained, with a A$39.00/sh price target.
