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  • James Hardie share price in spotlight as it upgrades profit guidance

    model construction workers working on increasing pile of coins, asx 200 building shares, boral share price

    The James Hardie Industries plc (ASX: JHX) share price is likely to buck the market weakness this morning after it upgraded its guidance.

    The S&P/ASX 200 Index (Index:^AXJO) is tipped to fall by more than 1% when the market opens, according to futures pricing.

    But the US-exposed building materials group could move in the opposite direction after it lifted its first quarter FY21 guidance (which is the current quarter).

    Expanding margins

    The group’s North America adjusted earnings before interest and tax (EBIT) margin is now expected to be between 27% and 29% for the three months to June 30. This compares with its previous forecasts of 22% to 27%.

    “In North America, housing market activity has steadily improved during the past seven weeks despite the COVID-19 pandemic,” said James Hardie’s chief executive Jack Truong.

    “The better than expected underlying housing market during our Q1 FY21 combined with our continued focus on customer engagement to drive market share gains, resulted in volume growth in the second half of the first quarter.”

    James Hardie’ guidance

    Management also provided guidance for a number of its business units. Volumes at its North America Exteriors division is expected to be flat to 2% ahead of the 1QFY20.

    The Australian business is tipped to be flat while its struggling European division will see volumes drop 11% to 14% over the same periods.

    James Hardie’s decision to cancel its latest dividend is one factor helping bolster the amount of cash on its balance sheet. Management increased its liquidity guidance to more than US$640 million from its earlier expectation of “greater than US$600 million”.

    The group will release its first quarter results on 11 August.

    Why the Boral share price could also lift

    The James Hardie share price might not be the only one outperforming the market this morning though.

    The better than expected rebound in US housing market is also likely to benefit other ASX building products companies with material exposure to that market.

    This includes the embattled the Boral Limited (ASX: BLD) share price as its income CEO Zlatko Todorcevski will be looking to restructure the group. Boral’s US business is a thorn in the side of shareholders.

    Other ASX stocks in the spotlight

    This in turn could lift sentiment towards Seven Group Holdings Ltd (ASX: SVW) after it bought a large stake in Boral.

    Another ASX stock that could jump on the James Hardie upgrade today is Reliance Worldwide Corporation Ltd (ASX: RWC).

    As previously reported, the US renovation and restoration market is also bouncing back strongly and that could lead to increased demand for the company’s plumbing repair solutions.

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    Brendon Lau owns shares of James Hardie Industries plc and Seven Group Holdings Limited. Connect with me on Twitter @brenlau.

    The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Reliance Worldwide Limited. The Motley Fool Australia has recommended Reliance Worldwide Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post James Hardie share price in spotlight as it upgrades profit guidance appeared first on Motley Fool Australia.

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  • ASX set to fall at the open; Metcash reports FY20 results

     

    https://go.arena.im/public/js/arenalib.js?p=motley-fool-australia&e=tvr8

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  • ASX share price winners and losers of last week

    2 street signs with winner and loser pointing in different directions

    The S&P/ASX 200 Index (INDEXASX: XJO) finished the week up by 1.6% despite exhibiting some early wobbles. The week saw continued heavy trading of real estate companies, a steadying of the oil price, the government announcement of a $1.5 billion infrastructure package, and the largest retail turnover rise in 38 years. Although most ASX shares saw gains, as always, some also lost ground for the week.

    Buy now, pay later

    Buy now, pay later shares continued their inexorable rise last week. The Afterpay Ltd (ASX: APT) share price rose by 12.86%, while Sezzle Inc (ASX: SZL) surged a massive 30.13%. However Zip Co Ltd (ASX: Z1P) saw its share price fall by 2.22% in the wake of likely profit taking. 

    Another fintech company to see a double digit rise last week was Pushpay Holdings Ltd (ASX: PPH) with a 12.13% increase on the back of updated earnings.

    Discretionary retail

    Better than expected retail sales figures, along with a strong progress report from Wesfarmers Ltd (ASX:WES), placed some fire under the retail discretionary sector. The ABS Retail Trade Survey found that retail turnover rose 16.3% in May. As mentioned, this was the largest seasonally adjusted rise in 38 years. 

    AP Eagers Ltd (ASX: APE) saw its share price jump 12.48% and Domino’s Pizza Enterprises Ltd. (ASX: DMP) also rose by 10.78%. In addition, Breville Group Ltd (ASX: BRG) saw a 13.67% rise in its share price. Lastly, small cap women’s clothing retailer City Chic Collective Ltd (ASX: CCX) saw a very impressive increase of 19.77% on its share price for the week. 

    Event-based ASX share price jumps

    Three ASX small-cap shares stood out during the week with large-scale price rises due to specific events.

    The Cardinal Resources Ltd (ASX: CDV) share price rose by 36.4% across the week on news that the company had recommended its shareholders accept a $300 million takeover deal.

    The Healius Ltd (ASX: HLS) share price also jumped by 11.4% following news of a $500 million sale of its medical centres.  

    Tiny engineering firm Decmil Group Limited (ASX: DCG) impressed the market by raising $52.4 million via a release of new shares due to start trading on 24 June. This capital raising is almost equal to the company’s entire current market capitalisation. Decmil saw its share price surge by 23.63% following news of the entitlement offer.

    Market laggards

    The real estate sector has been the highest traded sector over the past three weeks. Investors appear to be split over just how significant the impact of COVID-19 will be on the retail shopping A-REITs. While many A-REITs finished last week marginally higher, two with the largest exposure to retail saw falls. 

    The Vicinity Centres (ASX: VCX) share price fell by 3.8% as did the Scentre Group (ASX: SCG) with a decline of 4.33% for the week. 

    Other significant ASX share price falls were seen by airline and travel companies. Sydney Airport Holdings Pty Ltd (ASX: SYD) fell by 6.06%. Moreover, small cap Alliance Aviation Services Ltd (ASX: AQZ) saw its share price dive by a worrying 7.81%. This included a 2.64% tumble on Friday following the company’s announcement of a $30 million share purchase program, which was on top of its recent $90 million dollar capital raising. 

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    Daryl Mather owns shares of Sezzle Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia owns shares of AFTERPAY T FPO and Wesfarmers Limited. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited, Scentre Group, and Sezzle Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post ASX share price winners and losers of last week appeared first on Motley Fool Australia.

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