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

• Market Cap: $3.16B
• Dividend Yield: 1.56%
• Average Volume (3M): 414.13K
• Price to Earnings (P/E): 28.1
• Beta (1Y): 0.93
• Revenue Growth: -1.30%
• EPS Growth: -36.69%
• Country: US
• Employees: 7,500
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 1.26
• Shares Outstanding: 54,088,890
• 10 Day Avg. Volume: 554,001
• 30 Day Avg. Volume: 414,134
• PEG Ratio: -2.89
• Price to Book (P/B): 2.31
• Price to Sales (P/S): 1.18
• P/FCF Ratio: 25.88
• Enterprise Value/Market Cap: 1.68
• Enterprise Value/Revenue: 1.52
• Enterprise Value/Gross Profit: 5.01
• Enterprise Value/Ebitda: 10.94
• 1Y Price Target: $70.67
• Price Target Upside: 19.21% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 60 Neutral
• Price Target: $60.00 ▲(1.21% Upside)

H.B. Fuller Company's stock score is primarily influenced by its financial performance challenges, including declining revenue and profitability. Technical analysis indicates bearish trends, further impacting the score. However, the earnings call provided some optimism with strong EBITDA margin expansion and EPS growth, suggesting potential for future improvement. Valuation metrics indicate the stock is relatively expensive, which also weighs on the overall score.

Positive Factors

EBITDA Margin Expansion

The expansion in EBITDA margin indicates improved operational efficiency and cost management, which can enhance profitability and provide a buffer against economic challenges.

Medical Adhesive Business Growth

Strong growth in the medical adhesive segment reflects successful strategic focus and market demand, contributing to diversified revenue streams and long-term growth potential.

Strong Performance in EA Segment

Growth in the EA segment underscores the company's competitive positioning in high-demand markets, supporting sustained revenue and margin improvements.

Negative Factors

Organic Revenue Decline

The decline in organic revenue highlights challenges in maintaining sales volume, which could impact future revenue growth and market share if not addressed.

Volume Decline in HHC Segment

Volume decline in the HHC segment suggests demand challenges, potentially affecting the company's ability to leverage its full product portfolio for growth.

Solar Market Challenges

Regulatory changes and market oversupply in the solar segment pose risks to revenue stability, necessitating strategic adjustments to mitigate impact.

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 generates revenue primarily through the sale of its adhesive and sealant products, which are used in numerous applications across multiple industries. The company operates through several key segments, including Construction Adhesives, Industrial Adhesives, and Consumer & Craft Adhesives. Its revenue model is based on direct sales to customers, long-term contracts, and partnerships with distributors and manufacturers. Significant revenue streams include high-performance adhesives for packaging, automotive assembly, and construction. Additionally, the company invests in research and development to create innovative solutions that cater to evolving market demands, which can lead to increased market share and profitability. Strategic partnerships with other companies in the supply chain also contribute to its earnings by allowing H.B. Fuller to offer comprehensive solutions to customers.

H.B. Fuller Company Financial Statement Overview

Summary

H.B. Fuller Company maintains a solid financial position with strong operational profitability and manageable leverage. However, declining net profit margin and negative free cash flow growth are concerns that may impact future financial flexibility. The company should focus on enhancing revenue growth and improving cash flow efficiency.

Income Statement

H.B. Fuller Company shows a stable financial performance with solid profitability metrics. The Gross Profit Margin stands at 29.88% TTM, indicating effective cost management. However, the Net Profit Margin has decreased to 2.92% TTM from 3.65% in the previous year due to a reduction in net income. The EBIT and EBITDA margins are strong at 9.28% and 13.52% TTM, respectively, showcasing the company's solid operating profitability. Revenue growth rate shows a slight decline, which is a concern for long-term growth potential.

Balance Sheet

The Balance Sheet reflects moderate financial health. The Debt-to-Equity Ratio is 1.13 TTM, indicating a balanced use of debt and equity. The Return on Equity (ROE) is 5.50% TTM, reflecting modest returns for shareholders. The Equity Ratio stands at 36.52% TTM, showing a reasonable proportion of equity in the company's asset structure. Although leverage is under control, the company should focus on improving its equity base and ROE for better financial stability.

Cash Flow

Cash flow analysis reveals some areas for improvement. The Operating Cash Flow to Net Income Ratio is 2.24 TTM, indicating strong cash generation relative to net income. However, the Free Cash Flow to Net Income Ratio is 1.14 TTM, which is lower than desired, suggesting limited free cash available after capital expenditures. The Free Cash Flow Growth Rate is negative, signaling a decline in cash available for discretionary purposes.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.50B	3.57B	3.51B	3.75B	3.28B	2.79B
Gross Profit	1.06B	1.07B	1.01B	963.70M	845.32M	756.65M
EBITDA	487.02M	490.50M	528.60M	490.43M	438.12M	383.95M
Net Income	114.88M	130.26M	144.91M	180.31M	161.39M	123.72M
Balance Sheet
Total Assets	5.17B	4.93B	4.72B	4.46B	4.27B	4.04B
Cash, Cash Equivalents and Short-Term Investments	122.46M	169.35M	179.45M	79.91M	61.79M	100.53M
Total Debt	2.08B	2.07B	1.90B	1.77B	1.62B	1.77B
Total Liabilities	3.21B	3.10B	2.97B	2.85B	2.66B	2.65B
Stockholders Equity	1.96B	1.83B	1.76B	1.61B	1.61B	1.38B
Cash Flow
Free Cash Flow	121.37M	163.20M	259.26M	126.55M	117.23M	244.27M
Operating Cash Flow	242.41M	302.44M	378.40M	256.51M	213.32M	331.56M
Investing Cash Flow	-203.93M	-407.08M	-319.20M	-375.29M	-94.66M	-109.46M
Financing Cash Flow	-53.21M	112.09M	35.14M	160.32M	-154.07M	-239.21M

H.B. Fuller Company Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 59.28
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 59.28 is below the 20-day moving average (MA) of 60.66, below the 50-day MA of 59.57, and above the 200-day MA of 58.58, indicating a neutral trend. The MACD of -0.43 indicates Positive momentum. The RSI at 46.93 is Neutral, neither overbought nor oversold. The STOCH value of 30.91 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
HWKN	74 Outperform	$3.69B	43.57	17.47%	0.40%	9.51%	5.20%
WDFC	73 Outperform	$2.64B	30.72	33.66%	1.87%	6.52%	24.81%
AVNT	70 Neutral	$2.98B	25.24	5.01%	3.28%	3.28%	1.69%
PRM	63 Neutral	$3.13B	52.71	-0.51%	―	56.87%	―
KWR	62 Neutral	$2.29B	-292.32	-0.53%	1.47%	-3.09%	-106.46%
FUL	60 Neutral	$3.16B	28.09	6.05%	1.56%	-1.30%	-36.69%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%

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.