James Hardie (ASX:JHX): They say when things are glum there’s worse to come, but here’s why shares are bucking the trend in 2026

James Hardie (ASX:JHX) is one of the companies many would struggle to have sympathy for. It had a tortured history with its asbestos products. It was struggling even before 2025 with high inflation and subdued demand from aspirant home renovators.

And then there were the events of 2025 where JHX faced the uncertainty of tariffs. And this was the tip of the iceburg. It forked out nearly US$9bn for Azek, a manufacturer of outdoor living furniture, and copped scrutiny for the price it paid not to mention it used the chance to shift its primary listing to Wall St and did the deal without giving ASX shareholders a vote. To be fair, it was given a specific exemption from the ASX, although it chose not to go out of its way to give Australian shareholders a vote.

The ultimate insult it received was its removal from the MSCI Australia Index even thought it is an A$20bn company. Nonetheless, shares have rallied since bottoming out. Will 2026 be better? We might get a hint in a couple of weeks when it releases its next set of results, but let’s take an early look at its prospects.

What are the Best ASX Stocks to invest in right now?

Check our buy/sell tips

James Hardie has a tortured history

This company was founded in Melbourne but is domiciled in Ireland and these days headquartered in Chicago. James Hardie named after an actual person by that name, a Scottish expat who established a business importing oils and animal hides. In the early 1900s, the business pivoted to a building composite known as fibro-cement.

It used asbestos fibres to reinforce cement sheets and was used as a roofing and lining slate. And so, James Hardie became a substantial business, expanding into several building products containing asbestos, as well as mining for it in its own right. From the late 1970s onwards, governments started to ban asbestos as its side effects became known and the company only stopped selling products in 1987. It was about this time it entered the US market which has eventually become a far bigger and more important market for the company.

The Australian government was late to the anti-asbestos party, only banning asbestos in 2003. James Hardy had pivoted into non-asbestos building products by this time and now specialises in wall cladding and plasterboard products to builders and renovators. Unfortunately, the company has been paying the asbestos price for sometime, being sued by people that had suffered asbestos injuries.

James Hardie ended up redomiciling to Europe, first the Netherlands and then Ireland for tax reason. And it became more successful outside Australia, particularly in the USA. James Hardie was not the only business to be sued for asbestos, but one of the more prominent given it played such a role in the building and construction sector, and because it had known as far back as the late 1950s about the impacts of asbestos. Even nearly 40 years on, renovators and builders are uncovering materials in old houses and schools whilst people being exposed are gradually realising it.

It has to release an annual report (done by KPMG) of its future liabilities and the most recent report (for the 12 months top the end of March CY25) amounted to $176m and total future liability would be A$1.47bn. The company claims to have paid over A$2.2bn to the Asbestos Injuries Compensation Fund (AICF) which was set up by the NSW government for this purpose.

Onto more recent history…

The company rode the wave of the pandemic boom, driven by government stimulus. The past couple of years have been a mixed picture with volatile equity market conditions and volatile building market conditions. Although we’ve written about JHX since the last edition of this article in May 2024, we had not updated this one since then. We first wrote this article when shares fell 15% due to its annual results and poor guidance for the year ahead. Pandemic era-stimulus was receding, households were putting off plans to renovate given interest rates rose rapidly, and it appears rates will remain high for some time. And while it had raised prices, this only mitigated the damage somewhat.

12 months later, James Hardie delivered US$3.9bn in net sales (down 1%), $1.1bn in Adjusted EBITDA (down 4%) and $644m of ‘Adjusted Net Income’ (profit) which was down 9%. The company guided to ‘up low single-digits’ EBITDA growth and for at least $500m free cash flow (up 30%). In all markets, conditions were weak, but it offset the impact via higher average net sales prices. In Australia, net sales fell 13% and volumes fell 31%, but the higher average net sales price rose 25%.

Nonetheless, you could argue James Hardie investors had 2 greater concerns: Trump’s tariffs and Azek. On the issue of tariffs, investors were worried about the impact on the company. Now it is true that much production (at least with fibre cement) occurs in the US, but tariffs on certain inputs (such as pulp which is imported from Canada) had potential to hit costs. But even if the company could absorb those costs, tariffs could impact the broader construction market.

Then there was the Azek deal which was completed at the end of June. Whatever you thought of the deal and/or JHX’s motives for undertaking it, investors hated how Wall St investors got a vote on the deal while ASX investors did not as they should have been entitled to with any deal involving the issue of shares amounting to more than 15% of shares on issue.

The company used this chance to move its primary listing to New York and some feared it’d be a slippery slope to the company delisting altogether. JHX presumably underestimated the backlash, feeling the need to come out publicly and promise to change its process for rules regarding shareholder approvals for M&A…but it still went ahead with the deal. And so at its shareholders meeting, three board members were ousted, the remuneration report was rejected and the director fee pool increase was voted down.

Between early March 2024 and mid November 2025, JHX shares more than halved. Adding insult to injury, it faced an undignified removal from the MSCI Australia Index.

Are things improving?

James Hardie’s full year results are not due until May as it uses an April-March financial year. Its most recent update came in mid-November at which point it promoted director Nigel Stein to chair. Stein used to be chief executive of automotive and aerospace group GKN.

The company upped its profit guidance by 11% and part of this was due to the contribution of Azek. In January, the company told investors it was closing two of its US factories to save US$25m annually. It was estimated that its North American volume would be 13% below its 2022 peak, but the updated profit guidance was affirmed.

JHX is trading at 19.9x P/E for the year ahead (i.e. FY26). Consensus estimates expect its bottom line (i.e. profit) to fall -= to US$1.10 EPS from $1.49. But its revenue is expected to grow to US$4.8bn and EBITDA to US$1.23bn. For the year after (FY27), $5.5bn revenue, $1.5bn EBITDA and $1.24 EPS (ahead of FY26 but below FY25’s $1.49). But, the share price target amongst analysts is flat – A$34.38 per share vs $35.02 right now. We will admit that there are 17 analysts and the targets vary between A$27.12 and A$44.77.

So should I buy James Hardie shares?

In our view, we think things look better than they did some months ago. Even if the US construction market continues to lag, perhaps it can make money through focusing on fewer work but more profitable work. At the same time, we think it is a question of when and not if the company delists from the ASX and investors ought to keep that in mind before considering an investment.

• Is James Hardie an Australian company?

  No. Although it was founded in Australia, it is domiciled in Ireland and headquartered in Chicago. Moreover, its primary listing is in the USA.

• How much does James Hardie have to pay asbestos victims?

  The most recent report (for the 12 months top the end of March CY25) amounted to $176m annually and it was forecast that total future liability would be A$1.47bn.

• When did James Hardie stop using asbestos?

  In 1987.

• Should I buy James Hardie shares?

  In our view, only if you are comfortable with the prospect of JHX potentially delisting from the ASX. We think it is a question of when and not if.