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

• Market Cap: $3.28B
• Dividend Yield: 1.55%
• Average Volume (3M): 455.63K
• Price to Earnings (P/E): 33.0
• Beta (1Y): 0.94
• Revenue Growth: -0.09%
• EPS Growth: -37.60%
• Country: US
• Employees: 7,500
• Sector: Basic Materials
• Sector Strength: 71
• Industry: Chemicals - Specialty
• EPS (TTM): 1.18
• Shares Outstanding: 53,963,886
• 10 Day Avg. Volume: 753,906
• 30 Day Avg. Volume: 455,634
• PEG Ratio: -0.68
• Price to Book (P/B): 1.83
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 28.95
• Enterprise Value/Market Cap: 1.65
• Enterprise Value/Revenue: 0.38
• Enterprise Value/Gross Profit: 5.14
• Enterprise Value/Ebitda: 2.71
• 1Y Price Target: $65.00
• Price Target Upside: 6.98% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

• Rating: 75 Outperform
• Price Target: $68.00 ▲(11.92%Upside)

The most significant factors influencing the score are the stable financial performance and bullish technical indicators, although the stock's valuation is somewhat high. The earnings call highlights strong profitability and cost management but also flags revenue growth challenges. Overall, the stock demonstrates strength in operational efficiency and market momentum, but faces valuation concerns and market-driven revenue pressures.

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 sale of its adhesive products and solutions across multiple industries. Its key revenue streams include industrial adhesives used in packaging, converting, nonwoven and hygiene, general assembly, and durable assembly applications. The company also earns income from construction adhesives, sealants, and specialty materials utilized in building projects. Significant partnerships with leading manufacturers and a global distribution network enhance its market reach and contribute to its earnings. Additionally, H.B. Fuller invests in research and development to innovate and create tailored solutions for specific customer requirements, reinforcing its competitive position in the market.

H.B. Fuller Company Financial Statement Overview

Summary

H.B. Fuller Company demonstrates stable profitability and a balanced capital structure, but it faces challenges with declining revenue and free cash flow. While operating efficiency appears solid, the company should focus on improving revenue growth and managing debt levels to ensure long-term financial 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	3.53B	3.57B	3.51B	3.75B	3.28B	2.79B
Gross Profit	1.05B	1.06B	1.01B	963.70M	845.32M	756.65M
EBITDA	476.79M	490.50M	528.60M	490.43M	438.12M	383.95M
Net Income	103.08M	130.26M	144.91M	180.31M	161.39M	123.72M
Balance Sheet
Total Assets	5.13B	4.93B	4.72B	4.46B	4.27B	4.04B
Cash, Cash Equivalents and Short-Term Investments	96.78M	169.35M	179.45M	79.91M	61.79M	100.53M
Total Debt	2.11B	2.07B	1.90B	1.77B	1.62B	1.77B
Total Liabilities	3.26B	3.10B	2.97B	2.85B	2.66B	2.65B
Stockholders Equity	1.87B	1.83B	1.76B	1.61B	1.61B	1.38B
Cash Flow
Free Cash Flow	117.64M	163.20M	259.26M	126.55M	117.23M	244.27M
Operating Cash Flow	231.23M	302.44M	378.40M	256.51M	213.32M	331.56M
Investing Cash Flow	-215.25M	-407.08M	-319.20M	-375.29M	-94.66M	-109.46M
Financing Cash Flow	-36.27M	112.09M	35.14M	160.32M	-154.07M	-239.21M

H.B. Fuller Company Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 60.76
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FUL, the sentiment is Positive. The current price of 60.76 is above the 20-day moving average (MA) of 58.15, above the 50-day MA of 56.38, and below the 200-day MA of 63.68, indicating a neutral trend. The MACD of 1.82 indicates Negative momentum. The RSI at 63.66 is Neutral, neither overbought nor oversold. The STOCH value of 81.51 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FUL.

H.B. Fuller Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FUL	75 Outperform	$3.28B	33.00	5.62%	1.55%	-0.09%	-37.60%
SXT	73 Outperform	$4.55B	35.50	11.87%	1.52%	6.30%	41.01%
SXT	73 Outperform	$4.55B	35.50	11.87%	1.52%	6.30%	41.01%
WDFC	71 Outperform	$3.12B	36.67	37.14%	1.61%	8.71%	24.92%
WDFC	71 Outperform	$3.12B	36.67	37.14%	1.61%	8.71%	24.92%
AVNT	71 Outperform	$3.03B	30.65	4.32%	3.14%	3.58%	-5.17%
AVNT	71 Outperform	$3.03B	30.65	4.32%	3.14%	3.58%	-5.17%
OLN	64 Neutral	$2.43B	41.52	2.94%	3.80%	-1.13%	-81.74%
OLN	64 Neutral	$2.43B	41.52	2.94%	3.80%	-1.13%	-81.74%
SSL	57 Neutral	$3.15B	―	-28.05%	2.00%	-4.31%	-1421.83%
SSL	57 Neutral	$3.15B	―	-28.05%	2.00%	-4.31%	-1421.83%
Sector *	44 Neutral	C$992.05M	-6.68	-13.59%	2.53%	17.48%	-32.48%

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.