Here’s why James Hardie shares can keep the rally going

James Hardie Industries PLC (ASX: JHX) shares have been quietly rebuilding momentum. In the first weeks of 2026, James Hardie shares have soared 13.8% to $34.89 at the time of writing.

After a volatile period driven by fears of a housing slowdown and deal scepticism, the construction heavyweight is regaining support thanks to its strong market position, clear strategy, and improving global construction outlook.

Now, investors are starting to ask whether the current rally still has legs. Let’s have a look at the reasons why James Hardie shares could keep it going.

US as engine room

James Hardie is best known as the world’s leading manufacturer of fibre-cement products, supplying cladding, siding, and trim for residential and commercial buildings. The US remains the engine room of the business, accounting for the majority of earnings, with Australia, Europe, and Asia providing diversification.

Fibre cement continues to gain share from traditional materials thanks to its durability, fire resistance, and low maintenance. Advantages that resonate with builders and homeowners alike.

Pricing power is key

One of the key drivers behind the rally of James Hardie shares is the company’s pricing power. Even as construction volumes have softened, the company has been able to defend margins through price increases and disciplined cost control.

Its brand is deeply embedded in the US housing market, particularly in the repair and remodel segment, which tends to be more resilient than new home construction during downturns.

Expansion outdoor living products

The acquisition of Azek has also reshaped the growth story. By expanding into outdoor living products such as decking and rail, James Hardie has significantly increased its addressable market.

While the deal initially unsettled investors due to execution risk and higher debt, confidence is gradually improving as integration progresses and the strategic logic becomes clearer.

Housing cycles exposure

That said, the risks have not disappeared. James Hardie remains exposed to housing cycles. Particularly in the US, where high interest rates continue to pressure affordability. A sharper-than-expected slowdown in construction activity would weigh on volumes and earnings.

The Azek acquisition also needs to deliver on promised synergies, with any missteps likely to be punished by the market.

What’s next for James Hardie shares?

From an analyst perspective, sentiment on James Hardie stocks has improved but remains measured. Many see the stock as well-positioned for a recovery as housing conditions stabilise and interest rates eventually ease.

Expectations are not for a straight-line surge, but for steady gains supported by strong cash generation, operational leverage, and long-term demand for fibre cement solutions.

The average 12-month price target reflects that at $37.10, a modest 6% upside. The more upbeat analyst forecasts go as high as $46.20, a potential plus of 32% over the next 12 months.

The post Here’s why James Hardie shares can keep the rally going appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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.