James Hardie Industries (JHX) remains a "beat-and-raise" story, with company-specific factors rather than broader market growth expected to drive earnings over the next two years, Oppenheimer said in a report Thursday.

The firm said the company's growth should be supported by "organic volume" gains in its siding and trim business, "commercial revenue synergies" from the AZEK acquisition and continued market share gains.

Oppenheimer says earnings before interest, taxes, depreciation, and amortization could reach $1.56 billion in fiscal 2027 in an upside scenario, above the Wall Street estimate of $1.41 billion, and increase to $1.8 billion in fiscal 2028, while strong free cash flow generation is expected to reduce leverage "below 2x."

"New product launches," builder wins, the exit of competitor Nichiha from the fiber cement market and stronger-than-expected growth in the decking, railing and accessories segment could further lift results. Additional upside could come from distribution share gains with Boise Cascade (BCC) and other partners, the report said.

Oppenheimer has an outperform rating on James Hardie Industries with a price target of $30.

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