James Hardie Industries (JHX) continues to face a challenging macro and demand backdrop, leaving a "somewhat cautious" outlook on the stock, RBC Capital Markets said Friday in a report.

The demand environment remains uncertain even as the company executes on its strategic priorities, RBC said.

James Hardie's investor day on Tuesday will still showcase progress integrating AZEK and outline priorities for the combined business, including updates on commercial reach and on fiber-cement growth drivers such as new installation methods and building traction with regional homebuilders, the report said.

RBC said it doesn't expect any change to the company's $125 million cost-savings target over three years and anticipates an "upbeat message" on how the combined business plans to broaden its commercial opportunities.

RBC reiterated its sector-perform rating on James Hardie stock.

Price: 28.62, Change: +0.42, Percent Change: +1.51