Azzet reports on three stocks with double-digit market-moving updates to share today.
James Hardie tumbles after June quarter update
Shares in James Hardie (ASX: JHX) were down a whopping 28.4% by 1:55 pm AEST (3:55 am GMT) after the building products group spooked the market with a dismal set of June quarter numbers – with earnings missing consensus estimates by 20% - underpinned an equally dreary outlook.
Due in part to the closure of its small operations in the Philippines, net sales in the three months ended June 30 in the Australasian business were down 10% to US$121.6 million, while profit for the Australasian business was down 8% to US$37.8 million.
Net income for the first quarter fell short of the market consensus estimate of US$150.3 million.
Overall, the company’s net profit for the June quarter was down 60% to US$62.6 million, with sales revenue down 9% to US$900 million and behind the expected US$976.6 million.
Given that management had already flagged moderating growth expectations by customers - as uncertainty built throughout April and early May - today’s selloff has responded to revised full-year free cash flow guidance from "at least $500 million" to "at least $200 million".
“We believe it is prudent to plan for further inventory calibration by our channel partners into the back half of the calendar year,” said CEO Aaron Erter.
“Amidst this dynamic, we are also conservatively expecting to benefit from recent homebuilder exclusivity wins and new product launches more so in FY27 and beyond, rather than in the back half of FY26 as previously planned."
Erter told the market that it is employing strategies to deliver on this commitment, notwithstanding near-term conditions.
Erter also highlighted the performance of the highly controversial acquisition of U.S. leader in PVC materials, AZEK, which again exceeded guidance, sustaining top-line momentum and impressive profitability.
“For Deck, Rail & Accessories, solid sell-through growth demonstrates the resilient demand profile of the category and TimberTech's strong value proposition,” he said.
“We are working diligently to integrate and deliver on cost and commercial synergies on an accelerated timeline, positioning ourselves to capture the expansive material conversion opportunity ahead and deliver on our long-term value creation commitments to shareholders.”
Other key 1Q FY26 numbers announced today:
- North America Fiber Cement net sales of US$641.8 million, down 12%.
- Asia Pacific Fiber Cement net sales of US$121.6 million, down 10%.
- Europe Building Products net sales of US$136.5 million, up 7%.
- Operating cash flow totalled $207 million for the first quarter of FY26.
Outlook
While demand in both repair & remodel and new construction in North America is challenging, management also flagged headwinds in markets across Europe, particularly in Germany - the company's largest European market - and continued challenges in the Australian market.
In May, the company built into its full-year guidance an assumption that end market demand could decline by approximately mid-single digits, driven by expectations for further decline in repair & remodel.
The company’s CFO Rachel Wilson told the market that with respect to financial guidance, it continues to navigate a dynamic near-term environment while also remaining focused on scaling the organisation and investing where we see returns to drive long-term profitable growth.
For FY26, the company’s guidance now reflects three quarters of inorganic contribution from AZEK in addition to the organic James Hardie business:
- Net Sales for Siding & Trim: US$2.675 to US$2.850 billion.
- Net Sales for Deck, Rail & Accessories: US$775 to US$800 million.
- Total Adjusted earnings: US$1.05 to US$1.15 billion.
- Free Cash Flow: At least US$200 million.
James Hardie has a market cap of $13,8 billion; the share price is down 36% in one year and down 255 in the last week.
Consensus is Moderate Buy.
The Lottery Corporation rallies despite likely downgrade
Shares in The Lottery Corporation (ASX: TLC) were up around 7.8% despite the ASX-listed gaming giant posting a 12% drop in net profit to $365.5 million, with challenging economic conditions having a material impact on lottery ticket spend.
The market appears to have taken some comfort from attempts by the company to offset pressures with the refresh of the Saturday lotto and four $100 million jackpots across its Powerball and Oz Lotto brands.
Due partly to following a record jackpot performance in the previous financial year, revenue for the year ending June 30 was down 6% to $3.7 billion, while the company’s net profit slid to $365.5 million.
While the earnings of $644 million were a slight beat on Citi’s expectations, a weak trading environment, insufficient clarity into the Victorian licence renewal, and a lower-than-expected 16.7% Powerball price increase don’t seem to have weighed on market sentiment today.
However, the company raised its dividend to the top end of its target payout range and will pay a fully franked final dividend of 8.5 cents per share.
Citi suspects that the earlier-than-expected Powerball price increase will likely mask Visible Alpha consensus earnings downgrades in FY26, with the broker expecting further downgrades to FY27 forecasts.
The company’s outgoing CEO Sue van der Merwe noted that while customer participation remained healthy, players were seeking more value for money.
“We made targeted investments in the game portfolio, distribution channels and customer experience,” van der Merwe said.
“We also kept operating expenditure lower than our guided range, even while absorbing the final impacts of separation and inflationary headwinds.“
The Lottery Corporation has a market cap of $12.7 billion; the share price is up 16% in one year and up 6% in the last week.
The stock appears to be in a long-term uptrend, confirmed by multiple indicators.
Consensus is Hold.
Magellan Financial jumps on dividend boost
Shares in Magellan Financial (ASX: MFG) were up around 4.2% despite the global funds management firm reporting a 31% drop in full-year net profit to $165 million.
What clearly found favour with the market today was a 5% rise in operating profit to $159 million and plans to pay out more of it in dividends.
The company’s new dividend policy will see it pay out interim and final dividends of at least 80% of after-tax operating profit to shareholders.
As a result, the company issued a final dividend of 25.9 cents, plus a special dividend of 21.0 cents per share, both fully franked, bringing the total dividends for the year to 73.3 cents per share.
While investment management revenue was down 12% to $245.7 million, income from strategic partners Vinva and Barrenjoey were up 200% to $31 million - represented 20% of total operating profit.
Equally pleasing for investors, total assets under management (AUM) were up 8% on FY24 to $39.6 billion.
Commenting on today’s update, the company’s CEO Sophia Rahmani told the market that today’s result reflected the benefits of strategic diversification and improved investment performance across all its capabilities.
“We continue to execute on our growth strategy – introducing several new systematic equity funds, enhancing our global distribution footprint and improving investment performance across all our strategies,” she said.
“The early momentum we have generated with Vinva highlights the value of our distribution strength and institutional grade platform, as well as the high-quality investment expertise of Vinva.”
In FY26 Rahmani is focused on delivering superior investment performance, attracting and retaining clients, and deploying capital in a disciplined and value-accretive manner.
As we look ahead to FY26, we are operating from a position of strength and stability, with a clear focus on delivering to our clients, shareholder alignment and long-term value creation.”
As at 30 June 2025, the company had no debt and $562 million in liquid assets.
Magellan Financial has a market cap of $1.9 billion; the share price is up 10% in one year and up 13% in the last month.
The stock appears to be in a Medium-term rally confirmed by multiple indicators.
Consensus is Hold.
This article does not constitute financial or product advice. You should consider independent advice before making financial decisions.
