H.B. Fuller Company (NYSE:FUL) is included among the 14 Best Mid-Cap Dividend Stocks to Buy Now. Seaport Research Highlights Margin Progress at H.B. Fuller (FUL), Flags Growth Uncertainty On January 16, Seaport Research analyst Michael Harrison nudged up his price target on H.B. Fuller Company (NYSE:FUL) to $84 from $80, while sticking with a Buy rating. He said margins are still trending in the right direction, but he’s not quite as confident about how much organic growth the company can deliver from he ...

Company Structure and Operations - As of November 30, 2024, the company reorganized its operating segments, selling the North America Flooring business and forming the Building Adhesive Solutions segment[14]. - The company has sales offices and manufacturing plants in 24 countries outside the United States, with satellite sales offices in another 9 countries as of November 29, 2025[15]. - The company employs approximately 7,100 employees in 44 countries, with about 2,500 based in the U.S.[23]. Environmental Compliance and Sustainability - The company estimates expenditures to comply with environmental regulations over the next two years to be approximately $22.6 million, including $2.6 million of capital expenditures[42]. - The company focuses on developing adhesives and sealants to support customers' sustainability programs in response to changing consumer demand[41]. - The company maintains a strong environmental, health, and safety program to ensure workplace safety and compliance with regulations[24]. Research and Development - The company invests significantly in research and development to create new adhesive technology platforms and enhance product performance[39]. Customer Relationships and Revenue - The company has cultivated strong relationships with diverse customers, with no single customer accounting for more than 10% of consolidated net revenue[20]. - Approximately 56% of net revenue was generated outside the United States in 2025, indicating significant international exposure[233]. Financial Risks and Market Conditions - The company is exposed to market risks from changes in interest rates, foreign currency rates, and prices of raw materials, which could negatively affect financial performance[230]. - Unfavorable economic conditions may adversely impact sales volumes, pricing levels, and profitability, particularly during recessionary periods[231]. - A hypothetical one percent change in cost of sales due to foreign currency rate changes would have resulted in a change in net income of approximately $9.1 million or $0.17 per diluted share[236]. - The purchase of raw materials is the largest expenditure for the company, with a hypothetical one percent change in raw material costs resulting in a change in net income of approximately $12.6 million or $0.23 per diluted share[238]. - The annual impact on interest expense of a one-percentage point interest rate change on the outstanding balance of variable rate debt would have resulted in a change in net income of approximately $6.6 million or $0.12 per diluted share[232]. Risk Management Strategies - The company aims to balance non-functional currency denominated assets to liabilities to minimize foreign exchange impacts[234]. - Strategic sourcing agreements are in place to manage raw material price changes, limiting increases to supplier feedstock costs[238]. - The company does not enter into speculative positions with regard to derivative instruments to manage foreign currency exchange rate fluctuations[235]. - The principal raw materials include resins, polymers, and synthetic rubbers, with efforts to avoid sole source supplier arrangements[237]. Competitive Factors - The company’s competitive factors include product performance, supply assurance, technical service, quality, price, and customer service[18]. - The company is subject to various privacy and data protection laws, including the EU's General Data Protection Regulation (GDPR), which may impact operations[45].

Core Insights - H.B. Fuller Company (FUL) has significantly underperformed the broader market over the past 12 months, with its stock declining by 3% compared to a 17% rally in the S&P 500 [1] Company Performance - The stock of H.B. Fuller has shown a negative performance trend, contrasting sharply with the positive performance of the S&P 500 index [1]

Company Performance - H.B. Fuller Company (FUL) has underperformed the broad market significantly over the last 12 months, with its stock declining by 3% compared to a 17% rally in the S&P 500 [1] Analyst Background - The author of the article is a chemical engineer with a Master's degree in Food Technology and Economics, and a member of MENSA. They have authored multiple books on investing and mathematics, emphasizing the importance of financial literacy and immediate decision-making in investments [1] Investment Strategy - The author employs both fundamental and technical analysis in their investment approach, primarily utilizing options for investing and trading purposes [1] - The author achieved financial independence at the age of 45, indicating a successful application of their investment strategies [1] Investment Philosophy - The author follows Warren Buffett's principle of prioritizing financial statements over other forms of reading, highlighting a focus on data-driven investment decisions [1]

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Core Viewpoint - H.B. Fuller Company is a global leader in adhesives and specialty chemical products, with a current stock price of $63.49 and a "Buy" rating from Deutsche Bank, which has raised its price target from $70 to $72 [1][5]. Financial Performance - The Q4 2025 earnings call provided insights into H.B. Fuller's financial health, with the stock price reflecting a decrease of approximately 1.91% from the previous trading session [2]. - The stock experienced a low of $63.08 and a high of $66.37 during the day's trading, with a yearly fluctuation between a high of $67.05 and a low of $47.56 [3]. Market Metrics - H.B. Fuller's market capitalization is approximately $3.43 billion, indicating its size and value in the market [4]. - The trading volume of 1,365,709 shares suggests active investor interest and engagement [4][5].

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Core Viewpoint - H.B. Fuller reported fourth-quarter adjusted earnings that exceeded analyst expectations, but shares declined over 3% in pre-market trading due to revenue falling slightly short of expectations [1]. Financial Performance - The company posted adjusted earnings per share of $1.28, surpassing the consensus estimate of $1.23 [2]. - Revenue totaled $894.8 million, slightly below expectations of $902.51 million, representing a 3.1% year-over-year decline; however, excluding the impact of the flooring divestiture, revenue increased by 0.9% [2]. Profitability Metrics - Adjusted EBITDA rose 14.6% year-over-year to $170 million, with the adjusted EBITDA margin expanding to 19.0%, an increase of 290 basis points from the prior year [3]. - The margin expansion was driven by favorable pricing actions, lower raw material costs, acquisition synergies, and restructuring initiatives [3]. Future Outlook - For fiscal 2026, H.B. Fuller expects revenue to be flat to up 2% compared to 2025 [4]. - The company projected adjusted EBITDA in the range of $630 million to $660 million and guided adjusted earnings per share between $4.35 and $4.70 [4].

Core Insights - The company reported significant profitability improvements, with adjusted gross margin increasing by 290 basis points to 32.5%, driven by pricing, raw material cost actions, acquisitions, divestitures, and targeted cost reductions [1] - Adjusted EBITDA for fiscal 2025 was $170 million, reflecting a 15% year-on-year increase, while adjusted EPS rose 39% to $1.28 due to higher operating income and a reduced share count from share repurchases [1][6] - Despite a challenging economic backdrop, the company achieved double-digit profit growth in fiscal 2025, attributing margin expansion to pricing discipline and restructuring efforts [4] Financial Performance - For Q4, net revenue decreased by 3.1% year-over-year, primarily due to a weak economic environment and strategic portfolio actions, although it would have increased by about 1% when adjusting for the flooring divestiture [2] - Organic revenue fell by 1.3%, with a 2.5% volume decline partially offset by 1.2% pricing growth [2] - Cash flow from operations in Q4 was $107 million, up 25% year-on-year, driven by higher net income [6] Segment Performance - Engineering Adhesives (EA) showed organic revenue growth of 2.2%, with strength in automotive, electronics, and aerospace, while Hygiene, Health and Consumables (HHC) saw a 1.8% decline in organic revenue due to lower volume [7] - Building Adhesives Solutions (BAS) experienced a 4.8% decrease in organic sales, attributed to lower volume and tough comparisons from the previous year [7] 2026 Outlook - Management expects organic sales to be roughly flat for fiscal 2026, with adjusted EBITDA guidance of $630 million to $660 million and adjusted EPS of $4.35 to $4.70 [5][9] - The company anticipates a foreign currency translation benefit of approximately 1% to revenue if rates hold [9] - For Q1, revenue is expected to decline in low single digits, with adjusted EBITDA projected between $110 million and $120 million [11] Strategic Initiatives - The company is focusing on ongoing portfolio repositioning and a "Quantum Leap" initiative for manufacturing and warehouse consolidation [13] - In 2023 and 2024, the company acquired eight companies with a combined EBITDA of $41 million, which contributed $73 million of EBITDA in 2025 [14] - The company plans to reduce its solar business, with revenue expected to decline from $80 million in 2025 to around $50 million by the end of 2026 [16] Special Items - A reserve for a product liability legal claim related to the divested flooring business was recorded in Q4, amounting to approximately $35 million pre-tax [17]

Financial Data and Key Metrics Changes - Net revenue decreased by 3.1% year-on-year, with organic growth down 1.3% and volume down 2.5%, while pricing increased by 1.2% [5][11] - Adjusted EBITDA for Q4 was $170 million, up 15% year-on-year, with an EBITDA margin of 19%, an increase of 290 basis points [6][12] - Adjusted earnings per share rose by 39% to $1.28, driven by higher operating income and share repurchases [12] Business Line Data and Key Metrics Changes - In HHC, organic revenue decreased by 1.8% year-on-year, with EBITDA up almost 30% and EBITDA margin improving to 17.5% [6][7] - Engineering adhesives saw organic revenue growth of 2.2%, with adjusted EBITDA increasing by 17% and EBITDA margin rising to 23.5% [7][8] - BAS experienced a 4.8% decline in organic sales, with EBITDA down 7% due to lower volume [8] Market Data and Key Metrics Changes - Americas organic revenue was flat year-on-year, with growth in engineering adhesives offset by weaker results in packaging and construction [9] - EIMEA region saw a 6% decline in organic revenue, driven by lower volume in packaging and construction [9] - Asia-Pacific reported a 3% increase in organic revenue, with significant growth in engineering adhesives and HHC [9] Company Strategy and Development Direction - The company aims to achieve greater than 20% EBITDA margin and is focused on transforming into a higher-growth, higher-margin entity [4][10] - Strategic actions include portfolio repositioning, cost management, and investments in higher-margin markets [10][16] - M&A remains a key part of the strategy, with recent acquisitions in medical adhesives and fastener coating systems expected to drive future growth [16][18] Management's Comments on Operating Environment and Future Outlook - The economic environment is expected to remain challenging in 2026, with geopolitical tensions and inflation impacting manufacturing investment [10][14] - Despite these challenges, the company anticipates profit growth and margin expansion in 2026, supported by pricing and raw material cost actions [10][14] - Management expressed confidence in the ability to navigate the current landscape and achieve strategic goals [20] Other Important Information - The company is implementing a manufacturing footprint and warehouse consolidation initiative called Quantum Leap to improve cost structure [9][10] - Adjusted gross profit margin increased to 32.5%, reflecting pricing and cost management efforts [11] Q&A Session Summary Question: Q1 guidance and revenue outlook - Management indicated that Q1 revenue is expected to decline low single digits due to the timing of Chinese New Year, which will shift some revenue to Q2 [24][27] Question: Raw materials and pricing outlook for 2026 - The company expects a carryover benefit of around $25 million from pricing and raw materials into 2026, with an overall benefit of about $35 million anticipated [30][31] Question: BAS segment performance and government shutdown impact - Management clarified that the BAS segment faced tough comparisons and that the government shutdown did not significantly impact their performance [40][41] Question: Packaging market dynamics and competitive intensity - The packaging market remains competitive, with management focusing on working with customers where they can add the most value [92] Question: Geographic market demand growth - Management noted that China showed signs of recovery, with double-digit organic growth, while other regions remain challenging [98][100] Question: Free cash flow outlook and working capital - The company expects free cash flow to be impacted by higher working capital due to the Quantum Leap initiative, with a goal to reduce working capital below 15% in the long term [75]