Following a strong Q2 forecast from James Hardie (ASX:JHX), several brokerages have increased their estimates.

The strong prediction has led analysts at Citi to raise their price target for the Australian-based company to A$55.10/share, significantly up from the previous A$42.50/share.

Morningstar has also responded by boosting their fair value estimate by a considerable 13% to A$43/share, citing a stronger-than-expected Q1 result.

However, they regard the stock as modestly overvalued.

The prediction also led to a significant 16.4% jump in the shares of the world’s foremost fibre cement maker on Tuesday.

The company stated their expectation to log an adjusted net income ranging between $170 million and $190 million for Q2, surpassing the Factset estimate of $166 million.

‘We have raised our FY24 EBIT margin forecast to 29% for the North American operation,’ stated Morningstar.

Citi advanced their earnings before interest and tax (EBIT) expectations for the company and ranged them between 16% to 20% across FY24-26.

Following this trend, Morningstar anticipates that James Hardie will recommence dividend payments in fiscal 2026.

Citi emphasises ‘strong reasons’ for the continued outperformance of James Hardie within the market as competitions start to get easier, and rates it as a ‘buy’.

Of 15 analysts 11 rate the stock ‘buy’ or higher, 3 ‘hold’, and 1 ‘sell’, while the median price target is A$48.00, according to Refinitiv data.

The stock has seen a 76.6% increase this year up to the last market close.

James Hardie (ASX:JHX) is the world’s largest fibre cement maker.