H.B. Fuller Company (FUL) AI Stock Analysis

• Market Cap: $2.92B
• Dividend Yield: 1.65%
• Average Volume (3M): 678.98K
• Price to Earnings (P/E): 27.2
• Beta (1Y): 0.97
• Revenue Growth: 0.99%
• EPS Growth: -27.62%
• Country: US
• Employees: 7,500
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 1.99
• Shares Outstanding: 54,189,224
• 10 Day Avg. Volume: 699,542
• 30 Day Avg. Volume: 678,975
• PEG Ratio: 0.91
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.82
• Price to Cash Flow (P/CF): 8.60
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $58.33
• Price Target Upside: 11.42% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

H.B. Fuller's stock score reflects stable financial performance but is hindered by declining revenue and free cash flow. While the earnings call highlighted some strategic strengths, challenges such as higher raw material costs and weak market demand, coupled with a bearish technical outlook, result in a cautious overall score. The valuation suggests potential overvaluation, requiring careful consideration by investors.

Positive Factors

Cost Optimization

Cost optimization efforts, acquisition contributions, and strong demand in Construction Adhesives provide a silver lining for the FUL shares.

Mergers and Acquisitions

M&A optionality has increased for FUL, with a substantial pipeline of accretive bolt-on acquisitions expected to boost the growth profile of the company.

Negative Factors

Earnings and Guidance

Earnings below Street expectations and guidance adjusted lower.

Financial Performance

3FQ24 earnings miss and the associated FY24 guidance adjustments are a net negative for the shares.

Pricing and Cost Dynamics

The reality of a more challenging operating backdrop and unfavorable price:cost dynamics are powerful offsets.

H.B. Fuller Company Business Overview & Revenue Model

Company Description

H.B. Fuller Company, together with its subsidiaries, formulates, manufactures, and markets adhesives, sealants, coatings, polymers, tapes, encapsulants, additives, and other specialty chemical products worldwide. The company operates through three segments: Hygiene, Health and Consumable Adhesives; Engineering Adhesives; and Construction Adhesives. The Hygiene, Health and Consumable Adhesives segment produces and supplies specialty industrial adhesives such as, thermoplastic, thermoset, reactive, and water-based and solvent-based products for applications in various markets, including food and beverage containers, flexible packaging, consumer goods, package integrity and re-enforcement, and non-durable goods; corrugation, folding carton, tape and label, paper converting, envelopes, books, multi-wall bags, sacks, and tissue and towel; disposable diapers, feminine care, and medical garments; and health and beauty. The Engineering Adhesives segment produces and supplies high performance industrial adhesives such as reactive, light cure, two-part liquids, silicone, polyurethane, film, and fast cure products to the appliances and filters, windows, doors and wood flooring, and textile, transportation, electronics, medical, clean energy, aerospace and defense, appliance, heavy machinery, and insulating glass markets. The Construction Adhesives segment provides products used for tile setting, commercial roofing, heating, ventilation, and air conditioning and insulation applications, as well as caulks and sealants for the consumer market and professional trade. The company sells its products directly through distributors and retailers. H.B. Fuller Company was founded in 1887 and is headquartered in Saint Paul, Minnesota.

How the Company Makes Money

H.B. Fuller Company generates revenue primarily through the manufacture and sale of adhesives, sealants, and other specialty chemicals to a diverse array of industries. The company segments its operations into several key markets, including engineering adhesives, hygiene, health and consumable adhesives, and construction adhesives. Revenue is largely driven by the sale of these products to manufacturers who use them in their production processes. Additionally, H.B. Fuller benefits from strategic partnerships and collaborations that expand its market reach and product offerings, as well as from investments in research and development that lead to innovative, high-performance solutions. The company’s global footprint allows it to cater to a wide customer base, further solidifying its revenue streams.

H.B. Fuller Company Financial Statement Overview

Summary

H.B. Fuller Company shows stable profitability and a balanced capital structure, but faces challenges with declining revenue and free cash flow. Operating efficiency is solid, but revenue growth and debt management are critical for long-term health.

Income Statement

The company's income statement shows moderate profitability with a gross profit margin of approximately 29.6% TTM and a net profit margin of about 3.2% TTM. EBIT and EBITDA margins are at 9.3% and 13.2% TTM, respectively, indicating reasonable operating efficiency. Revenue has been relatively stable with a slight decline in recent periods, which could pose a risk if the trend continues.

Balance Sheet

The balance sheet reflects a stable equity base with a debt-to-equity ratio of approximately 1.23 TTM, indicating manageable leverage. Return on equity (ROE) is around 6.3% TTM, which is modest. The equity ratio stands at 35.8% TTM, suggesting a balanced capital structure. However, the high total debt level could be a concern if interest rates rise.

Cash Flow

Cash flow analysis shows a declining free cash flow, with a negative free cash flow growth rate, indicating potential challenges in generating cash. Operating cash flow to net income ratio is approximately 1.8 TTM, which is strong, but free cash flow to net income ratio has decreased to around 0.65 TTM, suggesting decreasing cash conversion efficiency.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
3.55B	3.57B	3.51B	3.75B	3.28B	2.79B
	Gross Profit
1.05B	1.06B	1.01B	963.70M	845.32M	756.65M
	EBIT
330.35M	348.22M	375.38M	343.45M	294.94M	245.13M
	EBITDA
468.37M	490.50M	528.60M	490.43M	438.12M	383.95M
	Net Income Common Stockholders
112.51M	130.26M	144.91M	180.31M	161.39M	123.72M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
105.74M	169.35M	179.45M	79.91M	61.79M	100.53M
	Total Assets
4.96B	4.93B	4.72B	4.46B	4.27B	4.04B
	Total Debt
2.18B	587.00K	1.90B	1.77B	1.62B	1.77B
	Net Debt
2.07B	-168.76M	1.72B	1.69B	1.55B	1.67B
	Total Liabilities
3.18B	3.10B	2.97B	2.85B	2.66B	2.65B
	Stockholders Equity
1.78B	1.83B	1.76B	1.61B	1.61B	1.38B
Cash Flow		Free Cash Flow
73.25M	163.20M	259.26M	126.55M	117.23M	244.27M
	Operating Cash Flow
202.18M	302.44M	378.40M	256.51M	213.32M	331.56M
	Investing Cash Flow
-485.71M	-407.08M	-319.20M	-375.29M	-94.66M	-109.46M
	Financing Cash Flow
240.41M	112.09M	35.14M	160.32M	-154.07M	-239.21M

H.B. Fuller Company Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 52.35
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FUL, the sentiment is Negative. The current price of 52.35 is below the 20-day moving average (MA) of 53.99, below the 50-day MA of 56.02, and below the 200-day MA of 70.62, indicating a bearish trend. The MACD of -0.96 indicates Negative momentum. The RSI at 44.79 is Neutral, neither overbought nor oversold. The STOCH value of 67.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FUL.

H.B. Fuller Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SXT	73 Outperform	$3.18B	25.46	11.79%	2.19%	6.92%	33.08%
WDFC	71 Outperform	$3.02B	35.60	37.14%	1.60%	8.71%	24.92%
AVNT	65 Neutral	$2.91B	17.24	7.32%	3.33%	3.11%	123.46%
FUL	61 Neutral	$2.92B	27.17	6.35%	1.65%	0.99%	-27.62%
OLN	58 Neutral	$2.40B	22.98	5.10%	3.95%	-4.29%	-74.85%
Sector *	48 Neutral	$1.92B	-1.99	-22.85%	3.95%	0.94%	-27.31%
SSL	46 Neutral	$2.18B	―	-28.05%	2.00%	-4.31%	-1421.83%

H.B. Fuller Company Corporate Events

H.B. Fuller Announces Leadership Transition and Strategic Focus

H.B. Fuller Company has announced the retirement of Lee R. Mitau as Chair of the Board, effective January 2025. He is succeeded by Teresa J. Rasmussen, a seasoned leader known for her global perspective and expertise in financial services. The transition is expected to support H.B. Fuller’s growth strategy as it aims to expand in high-growth markets and improve its EBITDA margin. Mitau’s departure follows years of significant contributions to the company’s development as the largest pureplay adhesives company globally.

H.B. Fuller Announces Retirement of Key Executive Traci Jensen

Traci L. Jensen, a key executive at H.B. Fuller Company, is set to retire on November 30, 2024, after a significant 15-year tenure that included roles such as Executive Vice President and Chief Administrative Officer, and Vice President of Global Business Process Improvement. Recognized for her pivotal contributions to the company’s growth, Jensen’s departure will lead to an upcoming announcement of her successor. Her leadership and service have been highly valued by the company.