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Fortune Brands Innovations (FBIN)
NYSE:FBIN
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Fortune Brands Innovations
(NYSE:FBIN)
59Neutral
Positive Factors
Growth and Margin Expansion
Positives include medium-term growth/margin expansion opportunity in Connected Products and a strong balance sheet.
Operational Efficiency
The consolidation of regional offices into a centralized headquarters is expected to bring efficiencies and unify operations across all brands.
Strategic Leadership Changes
The company's CFO is transitioning into the role of President of Security & Connected Products, which should help with the sales conversion in connected products, a key driver for the company.
Negative Factors
Demand and Sales
Demand softness is likely to persist for the next couple of quarters.
Earnings and Guidance
4Q24 came in below BMO/consensus estimates. FY25 guidance fell short of current consensus estimates.
Revenue and Market Performance
FBIN reported 4Q24 earnings below our estimates driven by misses in all three sales segments.
Fortune Brands Innovations (FBIN) vs. S&P 500 (SPY)
Market Cap
$6.29B
Dividend Yield1.8%
Average Volume (3M)2.03M
Price to Earnings (P/E)13.8
Beta (1Y)1.25
Revenue Growth-0.37%
EPS Growth18.78%
CountryUS
Employees11,000
SectorIndustrials
Sector Strength78
IndustryConstruction
Share Statistics
EPS (TTM)0.98
Shares Outstanding121,228,860
10 Day Avg. Volume2,937,779
30 Day Avg. Volume2,025,462
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.66
Price to Cash Flow (P/CF)7.00
P/FCF Ratio8.20
Enterprise Value/Market Cap1.77
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit5.37
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$67.33Price Target Upside22.84% Upside
Rating ConsensusHold
Number of Analyst Covering10
Fortune Brands Innovations Business Overview & Revenue Model
Company DescriptionFortune Brands Innovations, Inc. provides water, outdoor, and security products, including water management, connected products, outdoor living, material conversion, sustainability, safety, and wellness. The company's portfolio of brands comprising Moen, House of Rohl, Aqualisa, Therma-Tru, Larson, Fiberon, Master Lock, and SentrySafe. Fortune Brands Innovations, Inc. was incorporated in 1988 and is headquartered in Deerfield, Illinois.
How the Company Makes MoneyFortune Brands Innovations makes money through the manufacturing and sale of its diverse range of home and security products. The company's revenue model primarily revolves around its key business segments: plumbing, cabinetry, and door hardware. Each segment contributes significantly to its overall earnings. The plumbing segment generates income from the sale of faucets, sinks, showers, and other related products, while the cabinetry segment earns revenue from offering kitchen and bathroom cabinets. Additionally, the door hardware segment provides locks, knobs, and other security solutions. The company leverages strong distribution networks and partnerships with retailers, wholesalers, and contractors to reach its target markets effectively. Strategic acquisitions and innovation in product design further bolster its revenue streams, enabling FBIN to maintain a competitive edge in the industry.
Fortune Brands Innovations Financial Statement Overview
Summary
Fortune Brands Innovations displays strengths in profitability metrics with improved net profit margins and operational efficiencies. Despite a declining revenue trend, the company has managed to maintain a stable financial position. However, high leverage and asset reduction pose potential risks, alongside volatile cash flows.Income Statement
Fortune Brands Innovations has shown a mixed performance in terms of revenue and profit margins. The overall revenue has decreased from $7.66 billion in 2021 to $4.61 billion in 2024, indicating a downward trend in top-line growth. However, the company has maintained a stable gross profit margin of 100% due to a unique reporting structure. The net profit margin improved to 10.23% in 2024 from 8.74% in 2023, reflecting better cost management. EBIT and EBITDA margins also show improvements, suggesting operational efficiencies.65
Positive
Balance Sheet
The balance sheet highlights a decrease in total assets from $7.94 billion in 2021 to $6.56 billion in 2024, coupled with a reduced stockholders' equity from $3.06 billion to $2.42 billion over the same period. The debt-to-equity ratio is relatively high at 1.15, indicating a leveraged position, although it has improved slightly from previous years. The return on equity increased to 19.48% in 2024, showcasing effective utilization of equity to generate profit. The equity ratio improved to 36.91%, suggesting a stronger equity position relative to total assets.70
Positive
Cash Flow
The cash flow statement reveals fluctuating operating cash flows, with a significant drop from $1.06 billion in 2023 to $667.8 million in 2024. Free cash flow exhibited a decline from $799.3 million to $667.8 million in the same period. The operating cash flow to net income ratio remains strong at 1.42 in 2024, indicating solid cash generation relative to net income. However, the free cash flow to net income ratio decreased, suggesting less cash is being retained after capital expenditures.63
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.61B | 4.63B | 4.72B | 7.66B | 6.09B | Gross Profit |
| 2.07B | 1.93B | 1.93B | 2.75B | 2.16B | EBIT |
| 737.90M | 614.90M | 774.30M | 1.09B | 801.40M | EBITDA |
| 919.60M | 812.20M | 964.70M | 982.70M | 1.02B | Net Income Common Stockholders |
| 471.90M | 404.50M | 539.90M | 772.40M | 553.10M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 381.10M | 366.40M | 642.50M | 471.50M | 419.10M | Total Assets |
| 6.56B | 6.57B | 6.12B | 7.94B | 7.36B | Total Debt |
| 2.79B | 2.81B | 2.67B | 2.71B | 2.57B | Net Debt |
| 2.41B | 2.45B | 2.03B | 2.24B | 2.15B | Total Liabilities |
| 4.14B | 4.27B | 4.04B | 4.87B | 4.58B | Stockholders Equity |
| 2.42B | 2.29B | 2.08B | 3.06B | 2.78B |
| Cash Flow | Free Cash Flow | |||
| 667.80M | 799.30M | 320.20M | 474.50M | 675.20M | Operating Cash Flow |
| 667.80M | 1.06B | 566.30M | 688.70M | 825.70M | Investing Cash Flow |
| -302.90M | -1.04B | -452.00M | -207.10M | -923.50M | Financing Cash Flow |
| -363.40M | -271.30M | 72.50M | -428.60M | 111.60M |
Fortune Brands Innovations Technical Analysis
Negative
54.81
Price Trends
58.54
Negative
64.78
Negative
72.42
Negative
Market Momentum
-1.35
Negative
49.42
Neutral
81.49
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FBIN, the sentiment is Negative. The current price of 54.81 is above the 20-day moving average (MA) of 52.29, below the 50-day MA of 58.54, and below the 200-day MA of 72.42, indicating a neutral trend. The MACD of -1.35 indicates Negative momentum. The RSI at 49.42 is Neutral, neither overbought nor oversold. The STOCH value of 81.49 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FBIN.
Fortune Brands Innovations Risk Analysis
Fortune Brands Innovations disclosed 24 risk factors in its most recent earnings report. Fortune Brands Innovations reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Fortune Brands Innovations Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $7.19B | 50.20 | 10.73% | ― | 6.59% | 30.00% | |
73 Outperform | $6.46B | 20.03 | 18.11% | 0.72% | 1.38% | -3.80% | |
73 Outperform | $6.22B | 27.82 | 28.90% | ― | 5.17% | 10.39% | |
66 Neutral | $6.03B | 14.63 | 26.08% | 1.23% | 13.95% | 138.97% | |
63 Neutral | $4.21B | 11.55 | 5.28% | 250.72% | 4.13% | -9.42% | |
62 Neutral | $974.13M | 14.46 | 13.56% | ― | -9.61% | -47.79% | |
59 Neutral | $6.29B | 13.82 | 20.02% | 1.80% | -0.37% | 18.78% |
* Industrials Sector Average
Performance Comparison
FBIN
Fortune Brands Innovations
54.81
-17.37
-24.06%
LPX
Louisiana-Pacific
86.52
13.02
17.71%
SSD
Simpson Manufacturing Co
157.10
-22.76
-12.65%
TREX
Trex Company
60.00
-32.01
-34.79%
JBI
Janus International Group
6.96
-6.82
-49.49%
AZEK
AZEK Company
49.98
3.46
7.44%
Fortune Brands Innovations Earnings Call Summary
Earnings Call Date:Feb 06, 2025
(Q4-2024)
| % Change Since: -20.33%|
Next Earnings Date:May 06, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture. While the company achieved strong free cash flow and improved margins, and saw notable growth in its digital business, it faced significant challenges in its security segment and in China, leading to overall sales declines. The strategic investments and operational improvements provide optimism for future growth.Q4-2024 Updates
Positive Updates
Strong Free Cash Flow and Margin Improvement
2024 free cash flow was approximately $475 million with a cash conversion of more than 100% of net income. Full-year operating margins increased 90 basis points versus 2023.
Digital Business Growth
Digital sales were $214 million in 2024, with significant growth in the Flow business. At the end of 2024, the digital business had 4.7 million users, and Flow's retail and e-commerce POS was up over 100% versus Q4 2023.
Recognition and Strategic Investments
Fortune Brands was named to The Wall Street Journal's Top 250 Managed Companies list of 2024. Strategic investments were made in water filtration and connected lockout tagout platforms.
Operational and Structural Improvements
The company simplified its leadership structure and aligned its organization, leading to quicker decision-making and more direct involvement across the business.
Negative Updates
Decline in Security Segment
The security segment was impacted by a third-party software outage, leading to a 17% decline in Q4 sales. Full-year sales decreased 4%, and organic sales decreased around 10% when adjusting for the outage.
Challenges in China
Sales in China declined 30% in the fourth quarter and 31% for the full year. The market seems to have stabilized, but further declines could impact future results.
Overall Sales Decline
Fourth-quarter net sales were $1.1 billion, a 5% decrease compared to Q4 2023. Full-year organic sales were down 2%, excluding the impact of China and one-time disruptions.
Company Guidance
In the Fortune Brands Fourth Quarter 2024 Earnings Call, the company provided detailed guidance for 2025, focusing on several key metrics and strategic actions. Fortune Brands reported fourth-quarter net sales of $1.1 billion, marking a 5% decrease compared to the same period in 2023, with organic sales down 1% when adjusted for specific impacts. Fourth-quarter earnings per share (EPS) were $0.98, reflecting a 3% increase from Q4 2023, while operating margin improved by 60 basis points to 16.4%. For the full year 2024, the company delivered net sales of $4.6 billion, flat versus the previous year, with full-year EPS of $4.12, up 5% over 2023. Free cash flow for the year was approximately $475 million, with a cash conversion rate exceeding 100% of net income. The guidance highlighted a focus on leveraging digital innovation, optimizing pricing, and enhancing the company's digital and luxury product segments, with expectations of outperforming the market in 2025. Moreover, the company announced a new $1 billion share repurchase authorization, indicating strong confidence in its cash generation capabilities and commitment to long-term shareholder value creation.Fortune Brands Innovations Corporate Events
Executive/Board ChangesFinancial Disclosures
Fortune Brands Innovations Appoints New CFO Jonathan Baksht
Positive
Apr 3, 2025
On April 3, 2025, Fortune Brands Innovations announced the appointment of Jonathan Baksht as Executive Vice President and Chief Financial Officer, effective May 5, 2025. Baksht, with extensive experience as a CFO in public companies, is expected to drive the company’s financial strategy and support growth opportunities. His predecessor, David Barry, will remain President of Security and Connected Products, ensuring a smooth transition. The company also scheduled its first-quarter 2025 earnings announcement and investor conference call for May 6, 2025.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.