Shares of JHX have dropped over 3% in early trade as the building materials supplier announced Q1 profits fell 34% to $USD 57 million.
JHX reported that net sales for the three months to June 30 have grown 6% to $USD 507 million, compared to the same period last year.
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However, it said earnings margins were under pressure from higher production costs and increased competition in the construction materials sector.
At 26x forward earnings with a 2.7% forward yield , we’ve been advising clients about the risks of the low dividend, high P/E posture of the stock since it traded in the $22.50 area in early May.
We now see the next downside target for JHX in the $17.60 area.
James Hardie
