Guess which ASX 50 share is a top buy for 2025

Bell Potter has just slapped a buy rating on this stock. Let's see why.

| More on:
A man holding a cup of coffee puts his thumb up and smiles while at laptop.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The ASX 50 index is home to 50 of the largest companies on the Australian share market.

While not all of these shares are necessarily buys, one ASX 50 share that could be is listed below.

That's the view of analysts at Bell Potter, which have just initiated coverage on it.

Which ASX 50 share?

The ASX 50 share in question is James Hardie Industries plc (ASX: JHX).

It is a global building materials company and the largest global manufacturer of fibre cement products.

Bell Potter likes the company due to its market leadership position and belief that it is one of the most defensive and high-quality companies around. It said:

Since pioneering the material as a siding product in the 1980s, JHX has built and maintained market leadership through significant R&D investment, aggressive plant expansions ensuring low unit cost, and realising a powerful marketing machine, which underpins JHX's widespread brand recognition.

To that end, the Hardie name today has become synonymous with fibre cement as a building materials category – known colloquially in North America as 'HardiePlank' (with JHX c.90% category share). We see JHX as one of the most defensive and high-quality companies leveraged to US housing.

Sweet spot coming

Another reason that Bell Potter is bullish on James Hardie is that it believes that US housing is nearing a structural sweet spot. It explains:

JHX has c.65% exposure to the retrofit segment (R&R), which history suggests is generally less cyclical than new builds (c.35%). We estimate ~24m US single-family homes will reach their "prime" remodelling age (20-40 years) in 2027, marking an increase of +8% vs. 2023.

Notably, homes clad with vinyl – a category JHX has already substantially disrupted – are expected to age asymmetrically into this age bracket (+50% by 2030) and we expect should provide JHX with a significant opportunity for further share gain.

Time to buy

The note reveals that Bell Potter has initiated coverage on the ASX 50 share with a buy rating and $64.00 price target.

Based on its current share price of $53.82, this implies potential upside of 19% for investors over the next 12 months.

But with the James Hardie share price expected to tumble with the rest of the share market on Thursday following a selloff on Wall Street, it's likely that there will be even greater upside on offer in a few hours.

In addition, Bell Potter sees potential for the company's shares to rise even further based on its US ambitions. It concludes:

JHX recently outlined an ambitious target to triple North America EBITDA to ~US$3.4bn by FY35e which, according to JHX, would see the group deliver on a double-digit top-line CAGR and +350-500bps of margin expansion. We estimate 3x in FY35e (vs. BPe US$2.5bn) would be worth ~A$87.00 in share value today, supporting value upside potential should the market begin to price in this trajectory.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Broker Notes

A young man sits at his desk working on his laptop with a big smile on his face.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

man thinking about whether to invest in bitcoin
Broker Notes

Why Macquarie expects this ASX 200 dividend stock to keep outperforming

Macquarie has tipped this ASX 200 dividend stock to outperform. Let’s find out why.

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Broker Notes

These ASX 200 shares could rise 20% to 35%

These shares are being tipped to deliver market-beating returns by analysts.

Read more »

Keyboard button with the word sell on it.
Broker Notes

8 ASX All Ords stocks downgraded to sell ratings

Find out which shares are out of favour with the experts.

Read more »

Woman smiling whilst shopping in a clothing store.
Dividend Investing

Why this quality ASX 300 dividend stock is tipped to surge 54%

A leading fund manager forecasts significant outperformance from this quality ASX 300 dividend stock.

Read more »

A group of businesspeople clapping.
Broker Notes

Bell Potter names more of the best ASX 200 stocks to buy in June

These stocks could be best buys this month according to the broker.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Broker Notes

Why Macquarie forecasts this ASX All Ords media company is set to surge 19%

Up 42% in 2025, here’s why this ASX All Ords media stock could keep racing higher into 2026.

Read more »

Excited couple celebrating success while looking at smartphone.
Broker Notes

Buy this ASX 200 stock for a 50% return: Bell Potter

Let's see why the broker is bullish on this name.

Read more »