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H.B. Fuller Company (FUL)
:FUL
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H.B. Fuller Company
(NYSE:FUL)60Neutral
Positive Factors
Cost Optimization
Cost optimization efforts, acquisition contributions, and strong demand in Construction Adhesives provide a silver lining for the FUL shares.
M&A Activity
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 Performance
Earnings below Street expectations and guidance adjusted lower.
H.B. Fuller Company (FUL) vs. S&P 500 (SPY)
Market Cap
$3.10B
Dividend Yield1.56%
Average Volume (3M)464.38K
Price to Earnings (P/E)24.8
Beta (1Y)1.21
Revenue Growth1.65%
EPS Growth-10.99%
CountryUS
Employees7,500
SectorBasic Materials
Sector Strength56
IndustryChemicals
Share Statistics
EPS (TTM)2.30
Shares Outstanding54,189,224
10 Day Avg. Volume450,386
30 Day Avg. Volume464,377
Financial Highlights & Ratios
PEG Ratio0.91
Price to Book (P/B)N/A
Price to Sales (P/S)0.88
Price to Cash Flow (P/CF)9.10
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$69.75Price Target Upside22.26% Upside
Rating ConsensusHold
Number of Analyst Covering5
H.B. Fuller Company Business Overview & Revenue Model
Company DescriptionH.B. Fuller Company (FUL) is a leading global adhesives provider, serving a range of sectors including construction, consumer goods, electronics, and packaging. Founded in 1887 and headquartered in St. Paul, Minnesota, the company is renowned for its innovative adhesive solutions that enhance product performance and sustainability. H.B. Fuller operates in various market segments, offering products such as industrial adhesives, sealants, and specialty materials, which are critical in manufacturing and assembly processes across industries.
How the Company Makes MoneyH.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 demonstrates solid revenue and gross profit margins, although net profit margins are under pressure. The balance sheet is in a healthier state with reduced debt levels, enhancing financial stability. Cash flow performance presents concerns due to a sharp decline in free cash flow. Overall, the company is stable but faces challenges in improving profit margins and cash flow sustainability.Income Statement
H.B. Fuller Company shows a stable revenue base with a slight revenue growth rate of 1.65% over the TTM (Trailing-Twelve-Months). The gross profit margin is robust at 29.87%, indicating effective cost management. However, the net profit margin decreased to 3.65% from the previous year, suggesting challenges in controlling other expenses or interest costs. The EBIT and EBITDA margins of 9.92% and 13.62% respectively reflect moderate operational efficiency.75
Positive
Balance Sheet
The balance sheet reveals a significant reduction in total debt, leading to an extremely low debt-to-equity ratio, which is a positive sign of financial stability. The equity ratio stands at 37.06%, indicating a solid reliance on equity financing. Return on Equity (ROE) is relatively modest at 7.13%, suggesting moderate effectiveness in generating profits from equity.70
Positive
Cash Flow
The company experienced a substantial decline in free cash flow, with a negative growth rate of -59.91%. The operating cash flow to net income ratio is 1.66, indicating strong cash generation from operations. However, the free cash flow to net income ratio is 0.80, which shows some reliance on non-operating cash inflows for free cash generation.68
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.57B | 3.51B | 3.75B | 3.28B | 2.79B | Gross Profit |
| 1.06B | 1.01B | 963.70M | 845.32M | 756.65M | EBIT |
| 348.22M | 375.38M | 343.45M | 294.94M | 245.13M | EBITDA |
| 490.50M | 528.60M | 490.43M | 438.12M | 383.95M | Net Income Common Stockholders |
| 130.26M | 144.91M | 180.31M | 161.39M | 123.72M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 169.35M | 179.45M | 79.91M | 61.79M | 100.53M | Total Assets |
| 4.93B | 4.72B | 4.46B | 4.27B | 4.04B | Total Debt |
| 587.00K | 1.90B | 1.77B | 1.62B | 1.77B | Net Debt |
| -168.76M | 1.72B | 1.69B | 1.55B | 1.67B | Total Liabilities |
| 3.10B | 2.97B | 2.85B | 2.66B | 2.65B | Stockholders Equity |
| 1.83B | 1.76B | 1.61B | 1.61B | 1.38B |
| Cash Flow | Free Cash Flow | |||
| 163.20M | 259.26M | 126.55M | 117.23M | 244.27M | Operating Cash Flow |
| 302.44M | 378.40M | 256.51M | 213.32M | 331.56M | Investing Cash Flow |
| -407.08M | -319.20M | -375.29M | -94.66M | -109.46M | Financing Cash Flow |
| 112.09M | 35.14M | 160.32M | -154.07M | -239.21M |
H.B. Fuller Company Technical Analysis
Negative
57.05
Price Trends
61.34
Negative
68.29
Negative
73.89
Negative
Market Momentum
-1.69
Negative
39.96
Neutral
57.15
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 57.05 is below the 20-day moving average (MA) of 58.23, below the 50-day MA of 61.34, and below the 200-day MA of 73.89, indicating a bearish trend. The MACD of -1.69 indicates Negative momentum. The RSI at 39.96 is Neutral, neither overbought nor oversold. The STOCH value of 57.15 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 Risk Analysis
H.B. Fuller Company disclosed 21 risk factors in its most recent earnings report. H.B. Fuller Company 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
H.B. Fuller Company Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $7.73B | 19.66 | 21.49% | ― | 1.77% | 47.48% | |
76 Outperform | $14.41B | 20.88 | 31.75% | 1.89% | 4.68% | ― | |
76 Outperform | $16.00B | 24.57 | 25.61% | 1.56% | 0.12% | 24.30% | |
71 Outperform | $90.51B | 34.12 | 69.05% | 0.79% | 0.20% | 14.31% | |
65 Neutral | $26.18B | 19.34 | 19.13% | 2.33% | -4.59% | 11.09% | |
60 Neutral | $3.10B | 24.84 | 7.27% | 1.56% | 1.65% | -10.99% | |
47 Neutral | $2.64B | -4.00 | -31.55% | 3.33% | 2.93% | -29.90% |
* Basic Materials Sector Average
Performance Comparison
FUL
H.B. Fuller Company
57.05
-21.28
-27.17%
AVY
Avery Dennison
183.94
-28.38
-13.37%
PPG
PPG Industries
115.48
-23.95
-17.18%
RPM
RPM International
122.55
6.86
5.93%
SHW
Sherwin-Williams Company
363.62
26.04
7.71%
AXTA
Axalta Coating Systems
34.93
1.64
4.93%
H.B. Fuller Company Earnings Call Summary
Earnings Call Date: Jan 15, 2025 | % Change Since: -10.73% | Next Earnings Date: Mar 26, 2025
Earnings Call Sentiment Neutral
The earnings call reflected both strategic advancements in portfolio management and operational challenges, particularly in the HHC segment and consumer markets. While strategic acquisitions and cost-saving initiatives are positive, the significant margin pressures and unexpected volume declines weigh down the overall outlook.Highlights
Strategic Acquisitions and Portfolio Enhancement
Completed acquisitions of GEM S.r.l. and Medifill Ltd. to enhance market position in medical adhesives. The acquisitions are expected to deliver a 70 basis point adjusted EBITDA margin uplift in 2025.
Construction Adhesives Segment Growth
Organic sales increased 10.5% year-on-year with strong performance in roofing, growing over 30%. Adjusted EBITDA for Construction Adhesives increased 12% versus the prior year.
Manufacturing and Logistics Optimization Plan
Plan to reduce global manufacturing footprint from 82 to 55 facilities by 2030 and reduce North American warehouses from 55 to 10 by 2027, aiming for $75 million in annualized cost savings.
Lowlights
Deceleration in Consumer Product Goods Markets
Unexpected volume deceleration in consumer product goods and durable goods distribution channels delayed pricing improvements and resulted in margin pressure.
Fourth Quarter Margin Decline
Adjusted EBITDA in Q4 was down 14% year-on-year, with the margin declining to 16.1%, driven by unfavorable price and raw material dynamics.
Weakness in Packaging and Consumer Segments
Packaging-related end markets saw a slowdown in volume growth. The HHC segment experienced a decline in organic revenue by 2.2% year-on-year.
Company Guidance
During H.B. Fuller's Q4 2024 earnings call, the management provided guidance for fiscal year 2025, indicating a focus on strategic adjustments in response to market challenges. They projected a full-year net revenue decline of 2% to 4% compared to 2024, but an increase of 1% to 2% when adjusted for the divestiture of the flooring business. Organic revenue is expected to be flat to up 2%, with a 1% to 2% increase in prices projected. Adjusted EBITDA is anticipated to grow between 1% and 5%, ranging from $600 million to $625 million, driven by pricing actions, restructuring savings, and acquisitions, despite a challenging growth environment. The company plans to cut its global manufacturing footprint from 82 to 55 facilities by 2030, expecting $75 million in annualized cost savings upon completion. Additionally, H.B. Fuller anticipates achieving an adjusted EBITDA margin uplift of approximately 70 basis points in 2025 from recent acquisitions and divestitures.H.B. Fuller Company Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
H.B. Fuller Announces Leadership Transition and Strategic Focus
Positive
Oct 21, 2024
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.
Executive/Board Changes
H.B. Fuller Announces Retirement of Key Executive Traci Jensen
Neutral
Oct 7, 2024
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.
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.