James Hardie Industries (ASX:JHX) reported a solid quarter, despite weaker volumes in siding, with the beat driven by upside on margins and growth in decking, according to a Wednesday note by Jefferies.

James Hardie reported fiscal fourth quarter adjusted earnings of $0.30 per share, down from $0.36 a year earlier and in line with expectations. It also reported earnings before interest, taxes, depreciation, and amortization of AU$381 million, ahead of consensus.

Its management is confident it can deliver organic growth in siding from its commercial initiatives, even in a down market. For the full year, the management expects sales of AU$5.25 billion to AU$5.41 billion and EBITDA of AU$1.450 billion to AU$1.50 billion.

James Hardie framed the macroeconomic backdrop as challenging, with mortgage rates rising. Integration of Azek and executing on commercial synergies remains the firm's strategic focus. It is on track to hit AU$125 million run-rate revenue synergies exiting fiscal 2027.

The investment firm has a buy recommendation on James Hardie with a price target of AU$30 per share.