H.B. Fuller's Stock Down 16% in a Month: What's Weighing on it?

H.B. Fuller Company’s FUL shares have lost 16.4% in the past month, underperforming its industry’s decline of 8%.

It has also underperformed the S&P 500’s roughly 1.9% decline over the same period.

Image Source: Zacks Investment Research

Let’s dive into the factors behind this Zacks Rank #4 (Sell) stock’s price decline.

Guidance Cut Weighs on FUL

The company recently issued unaudited preliminary financial results for fiscal 2024. FUL now anticipates fiscal 2024 net revenues of approximately $3.57 billion, adjusted earnings per share of around $3.84 and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of roughly $594 million, down from the previous guidance of adjusted EBITDA of $610-$620 million, which was communicated on Sept. 25, 2024. In addition, the company plans to deliver around $300 million in cash flow from operations for the year.

H.B. Fuller's fourth-quarter net revenues and earnings were hurt by weaker-than-expected conditions and delayed orders, particularly in the consumer product and packaging-related end industries, as well as durable goods distribution. Also, delayed customer order patterns pushed price increases into fiscal 2025, while rising raw material costs, particularly in Hygiene, Health and Consumable (HHC) Adhesives, adversely impacted adjusted EBITDA. 

FUL’s earnings missed the Zacks Consensus Estimate in the last reported quarter, with the negative surprise being 8.9%. Earnings estimates for FUL have been going down for fiscal 2024 and fiscal 2025 over the past 60 days.

Key Picks

Better-ranked stocks in the basic materials space include Carpenter Technology Corporation CRS, Sylvamo Corporation SLVM and Silvercorp Metals Inc. SVM. 

Carpenter Technology currently sports a Zacks Rank #1 (Strong Buy). CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 14.1%. The company's shares have soared 176.6% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.

Sylvamo, which currently carries a Zacks Rank #2 (Buy), beat the consensus estimate in each of the trailing four quarters. In this time frame, it has delivered an earnings surprise of roughly 16.7%, on average. SLVM’s shares have rallied 60.5% over the past year. 

Silvercorp, currently carrying a Zacks Rank #1, beat the consensus estimate in three of the last four quarters and matched once, with the average earnings surprise being 16.5%. SVM has gained around 24% in the past year.



 

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Carpenter Technology Corporation (CRS): Free Stock Analysis Report
 
H. B. Fuller Company (FUL): Free Stock Analysis Report
 
Silvercorp Metals Inc. (SVM): Free Stock Analysis Report
 
Sylvamo Corporation (SLVM): Free Stock Analysis Report

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