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On Tuesday, Citi analysts reiterated a Neutral rating for HB Fuller stock (NYSE: NYSE:FUL), maintaining a price target of $62. The analysts expressed caution in their projections for organic sales growth in the second half of 2025, particularly in the Engineering Adhesives (EA) and Building & Assembly Solutions (BAS) segments, due to limited visibility in material end-market growth, especially in the solar and new residential sectors.
The analysts revised their overall fiscal year 2025 organic sales growth forecast to approximately 0.6%, down from the previous estimate of around 1.0%. This adjustment is counterbalanced by a favorable shift in foreign exchange rates, which now provide a modest 1% year-over-year tailwind, compared to the prior 2% headwind, attributed to a weakening U.S. dollar. Despite growth challenges, InvestingPro data shows HB Fuller maintains strong financial health with a GOOD overall score and has consistently raised dividends for 32 consecutive years.
Current challenges in the solar sector are noted, with the analysts suggesting potential exacerbation due to revisions in the reconciliation bill that targets the termination of certain Inflation Reduction Act (IRA) credits. Despite these concerns, the fiscal year 2025 EBITDA estimate has been adjusted upward from $608 million to $614 million due to favorable foreign exchange revisions.
Looking ahead, the fiscal year 2026 EBITDA estimates remain largely unchanged, increasing by less than $1 million to approximately $648 million. This slight increase is attributed to a higher base, offset by slightly weaker organic growth and margin assumptions. The valuation of HB Fuller is based on a 13.5x price-to-earnings multiple and an 8.5x enterprise value-to-EBITDA multiple on 2026 estimates, supporting the unchanged price target of $62.
In other recent news, HB Fuller Company reported its financial results for the first quarter of 2025, surpassing analysts’ expectations with an adjusted earnings per share (EPS) of $0.54 against the forecasted $0.50, and revenue reaching $789 million, exceeding the anticipated $769.56 million. The company also announced a 5.6% increase in its regular quarterly cash dividend, marking the 56th consecutive year of dividend growth. This increase reflects HB Fuller’s commitment to shareholder value and confidence in its financial stability. Additionally, during its recent Annual Meeting, shareholders approved the executive compensation plan and re-elected three directors for another three-year term.
Baird analysts upgraded HB Fuller stock from a Neutral to an Outperform rating, maintaining a price target of $60.00, citing the company’s attractive long-term outlook despite current visibility challenges. The firm highlighted the potential for strategic financial management and acquisitions to strengthen HB Fuller’s position in the adhesives market. The company’s operational focus on achieving a 20% EBITDA margin through cost optimization and portfolio reshaping was also noted. Furthermore, Baird’s continued endorsement of HB Fuller as a Top Pick reflects an optimistic outlook on the company’s future performance.
These developments indicate that HB Fuller is navigating current market conditions effectively while maintaining a focus on strategic growth and financial discipline.
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