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Fortune Brands Innovations (FBIN)
NYSE:FBIN
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Fortune Brands Innovations
(NYSE:FBIN)
64Neutral
Positive Factors
Growth Opportunities
Positives include medium-term growth/margin expansion opportunity in Connected Products and a strong balance sheet.
Strategic Leadership
The company's CFO is transitioning into the role of President of Security & Connected Products, which should help with the sales conversion in connected products, a key driver for the company.
Negative Factors
Earnings Performance
4Q24 came in below BMO/consensus estimates.
Financial Guidance
FBIN's 1Q25 guidance for (4%) revenue decline and 12-13% operating margin implies EBIT roughly 20% below consensus.
Market Challenges
Demand softness is likely to persist for the next couple of quarters.
Fortune Brands Innovations (FBIN) vs. S&P 500 (SPY)
Market Cap
$7.46B
Dividend Yield1.59%
Average Volume (3M)1.57M
Price to Earnings (P/E)16.2
Beta (1Y)1.36
Revenue Growth-0.37%
EPS Growth18.78%
CountryUS
Employees11,000
SectorIndustrials
Sector Strength66
IndustryConstruction
Share Statistics
EPS (TTM)3.75
Shares Outstanding122,576,650
10 Day Avg. Volume1,515,406
30 Day Avg. Volume1,566,161
Financial Highlights & Ratios
PEG Ratio0.86
Price to Book (P/B)N/A
Price to Sales (P/S)1.66
Price to Cash Flow (P/CF)7.00
P/FCF Ratio8.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$80.64Price Target Upside32.59% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
Fortune Brands Innovations Business Overview & Revenue Model
Company DescriptionFortune Brands Innovations (FBIN) is a leading home and security products company that operates in multiple sectors, primarily focusing on plumbing, cabinetry, and door hardware. The company provides innovative and high-quality solutions designed to enhance residential and commercial environments. FBIN's core products include a wide range of plumbing fixtures, cabinets, and security solutions that cater to diverse customer needs across North America and international markets.
How the Company Makes MoneyFortune Brands Innovations makes money through the manufacturing and sale of its diverse range of home and security products. The company's revenue model primarily revolves around its key business segments: plumbing, cabinetry, and door hardware. Each segment contributes significantly to its overall earnings. The plumbing segment generates income from the sale of faucets, sinks, showers, and other related products, while the cabinetry segment earns revenue from offering kitchen and bathroom cabinets. Additionally, the door hardware segment provides locks, knobs, and other security solutions. The company leverages strong distribution networks and partnerships with retailers, wholesalers, and contractors to reach its target markets effectively. Strategic acquisitions and innovation in product design further bolster its revenue streams, enabling FBIN to maintain a competitive edge in the industry.
Fortune Brands Innovations Financial Statement Overview
Summary
Fortune Brands Innovations displays strengths in profitability metrics with improved net profit margins and operational efficiencies. Despite a declining revenue trend, the company has managed to maintain a stable financial position. However, high leverage and asset reduction pose potential risks, alongside volatile cash flows.Income Statement
Fortune Brands Innovations has shown a mixed performance in terms of revenue and profit margins. The overall revenue has decreased from $7.66 billion in 2021 to $4.61 billion in 2024, indicating a downward trend in top-line growth. However, the company has maintained a stable gross profit margin of 100% due to a unique reporting structure. The net profit margin improved to 10.23% in 2024 from 8.74% in 2023, reflecting better cost management. EBIT and EBITDA margins also show improvements, suggesting operational efficiencies.65
Positive
Balance Sheet
The balance sheet highlights a decrease in total assets from $7.94 billion in 2021 to $6.56 billion in 2024, coupled with a reduced stockholders' equity from $3.06 billion to $2.42 billion over the same period. The debt-to-equity ratio is relatively high at 1.15, indicating a leveraged position, although it has improved slightly from previous years. The return on equity increased to 19.48% in 2024, showcasing effective utilization of equity to generate profit. The equity ratio improved to 36.91%, suggesting a stronger equity position relative to total assets.70
Positive
Cash Flow
The cash flow statement reveals fluctuating operating cash flows, with a significant drop from $1.06 billion in 2023 to $667.8 million in 2024. Free cash flow exhibited a decline from $799.3 million to $667.8 million in the same period. The operating cash flow to net income ratio remains strong at 1.42 in 2024, indicating solid cash generation relative to net income. However, the free cash flow to net income ratio decreased, suggesting less cash is being retained after capital expenditures.63
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.61B | 4.63B | 4.72B | 7.66B | 6.09B | Gross Profit |
| 2.07B | 1.93B | 1.93B | 2.75B | 2.16B | EBIT |
| 737.90M | 614.90M | 774.30M | 1.09B | 801.40M | EBITDA |
| 919.60M | 812.20M | 964.70M | 982.70M | 1.02B | Net Income Common Stockholders |
| 471.90M | 404.50M | 539.90M | 772.40M | 553.10M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 381.10M | 366.40M | 642.50M | 471.50M | 419.10M | Total Assets |
| 6.56B | 6.57B | 6.12B | 7.94B | 7.36B | Total Debt |
| 2.79B | 2.81B | 2.67B | 2.71B | 2.57B | Net Debt |
| 2.41B | 2.45B | 2.03B | 2.24B | 2.15B | Total Liabilities |
| 4.14B | 4.27B | 4.04B | 4.87B | 4.58B | Stockholders Equity |
| 2.42B | 2.29B | 2.08B | 3.06B | 2.78B |
| Cash Flow | Free Cash Flow | |||
| 667.80M | 799.30M | 320.20M | 474.50M | 675.20M | Operating Cash Flow |
| 667.80M | 1.06B | 566.30M | 688.70M | 825.70M | Investing Cash Flow |
| -302.90M | -1.04B | -452.00M | -207.10M | -923.50M | Financing Cash Flow |
| -363.40M | -271.30M | 72.50M | -428.60M | 111.60M |
Fortune Brands Innovations Technical Analysis
Negative
60.82
Price Trends
66.67
Negative
70.63
Negative
73.90
Negative
Market Momentum
-1.12
Negative
38.00
Neutral
31.38
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FBIN, the sentiment is Negative. The current price of 60.82 is below the 20-day moving average (MA) of 62.53, below the 50-day MA of 66.67, and below the 200-day MA of 73.90, indicating a bearish trend. The MACD of -1.12 indicates Negative momentum. The RSI at 38.00 is Neutral, neither overbought nor oversold. The STOCH value of 31.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FBIN.
Fortune Brands Innovations Risk Analysis
Fortune Brands Innovations disclosed 24 risk factors in its most recent earnings report. Fortune Brands Innovations reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Fortune Brands Innovations Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $6.07B | 23.18 | 39.28% | 0.82% | 11.62% | 20.76% | |
65 Neutral | $6.14B | 27.51 | 28.90% | ― | 5.17% | 10.39% | |
64 Neutral | $7.46B | 16.20 | 20.02% | 1.59% | -0.37% | 18.78% | |
62 Neutral | $635.47M | 12.45 | 8.29% | ― | -5.86% | 16.49% | |
62 Neutral | $8.05B | 13.61 | 3.91% | 3.11% | 3.81% | -13.91% | |
60 Neutral | $14.56B | 18.30 | -118.61% | 1.72% | -1.74% | -6.91% | |
44 Neutral | $514.75M | ― | -25.51% | ― | -15.09% | -358.01% |
* Industrials Sector Average
Performance Comparison
FBIN
Fortune Brands Innovations
60.82
-21.14
-25.79%
AWI
Armstrong World
139.55
17.39
14.24%
BXC
Bluelinx Holdings
76.61
-51.45
-40.18%
MAS
Masco
68.67
-7.81
-10.21%
TREX
Trex Company
57.31
-40.66
-41.50%
JELD
JELD-WEN
6.03
-15.15
-71.53%
Fortune Brands Innovations Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -11.60% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture. While the company achieved strong free cash flow and improved margins, and saw notable growth in its digital business, it faced significant challenges in its security segment and in China, leading to overall sales declines. The strategic investments and operational improvements provide optimism for future growth.Highlights
Strong Free Cash Flow and Margin Improvement
2024 free cash flow was approximately $475 million with a cash conversion of more than 100% of net income. Full-year operating margins increased 90 basis points versus 2023.
Digital Business Growth
Digital sales were $214 million in 2024, with significant growth in the Flow business. At the end of 2024, the digital business had 4.7 million users, and Flow's retail and e-commerce POS was up over 100% versus Q4 2023.
Recognition and Strategic Investments
Fortune Brands was named to The Wall Street Journal's Top 250 Managed Companies list of 2024. Strategic investments were made in water filtration and connected lockout tagout platforms.
Operational and Structural Improvements
The company simplified its leadership structure and aligned its organization, leading to quicker decision-making and more direct involvement across the business.
Lowlights
Decline in Security Segment
The security segment was impacted by a third-party software outage, leading to a 17% decline in Q4 sales. Full-year sales decreased 4%, and organic sales decreased around 10% when adjusting for the outage.
Challenges in China
Sales in China declined 30% in the fourth quarter and 31% for the full year. The market seems to have stabilized, but further declines could impact future results.
Overall Sales Decline
Fourth-quarter net sales were $1.1 billion, a 5% decrease compared to Q4 2023. Full-year organic sales were down 2%, excluding the impact of China and one-time disruptions.
Company Guidance
In the Fortune Brands Fourth Quarter 2024 Earnings Call, the company provided detailed guidance for 2025, focusing on several key metrics and strategic actions. Fortune Brands reported fourth-quarter net sales of $1.1 billion, marking a 5% decrease compared to the same period in 2023, with organic sales down 1% when adjusted for specific impacts. Fourth-quarter earnings per share (EPS) were $0.98, reflecting a 3% increase from Q4 2023, while operating margin improved by 60 basis points to 16.4%. For the full year 2024, the company delivered net sales of $4.6 billion, flat versus the previous year, with full-year EPS of $4.12, up 5% over 2023. Free cash flow for the year was approximately $475 million, with a cash conversion rate exceeding 100% of net income. The guidance highlighted a focus on leveraging digital innovation, optimizing pricing, and enhancing the company's digital and luxury product segments, with expectations of outperforming the market in 2025. Moreover, the company announced a new $1 billion share repurchase authorization, indicating strong confidence in its cash generation capabilities and commitment to long-term shareholder value creation.Fortune Brands Innovations Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Fortune Brands Innovations Announces Restructuring and Leadership Changes
Neutral
Jan 22, 2025
On January 22, 2025, Fortune Brands Innovations announced plans to consolidate its U.S. regional offices into a new headquarters in Deerfield, Illinois, expected to be completed by December 31, 2026. This move aims to enhance innovation and operational efficiency while incurring restructuring charges estimated between $50 million to $80 million. Additionally, the company is restructuring its executive leadership to improve growth and efficiency, eliminating the Group President role and appointing David Barry as President of Security and Connected Products. Cheri Phyfer will transition to an advisory role until July 1, 2025, following her departure.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.