Should You Consider H.B. Fuller After Recent Packaging and Construction Contract News?

• Ever wondered if H.B. Fuller is offering real value right now, or if you might be getting in at the wrong price? Let’s break down what’s driving the stock and where things stand today.
• H.B. Fuller's shares have dropped 2.6% over the last week and are down 4.3% over the past month, continuing a year-to-date slide of 9.8%. This follows a 23.2% decline over the last year, which could signal either ripe opportunity or lingering risk in the current valuation.
• Industry headlines have focused lately on shifting demand for specialty chemicals, and H.B. Fuller’s role in several major packaging and construction projects has kept the company in the news. These developments have contributed to recent stock volatility, as investors weigh the upside of new contracts against broader macro uncertainties.
• Right now, H.B. Fuller scores a 3 out of 6 on our quick valuation check, meaning it appears undervalued on half of our measures. Next, we will walk through each valuation approach and reveal why there might be an even better way to cut through the noise before the article wraps up.

Find out why H.B. Fuller's -23.2% return over the last year is lagging behind its peers.

Approach 1: H.B. Fuller Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates what a company's shares should be worth by forecasting future cash flows, then discounting them to their present value. This approach relies on the idea that a stock’s intrinsic value is closely tied to its ability to generate cash in the years ahead.

For H.B. Fuller, the DCF model uses a two-stage free cash flow to equity method as its foundation. Currently, the company produces approximately $115.5 million in free cash flow. Analyst projections show steady annual growth, with free cash flow expected to reach about $199.3 million by 2026 and $249 million by 2035, based on a blend of analyst estimates and extrapolated trends from Simply Wall St.

Using these projections and discounting future cash flows back to today's value in dollars, the model calculates an estimated fair value of $63.49 per share. Compared with the current share price, this means H.B. Fuller appears to be trading at an 11.4% discount. According to this analysis, the stock seems undervalued.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests H.B. Fuller is undervalued by 11.4%. Track this in your watchlist or portfolio, or discover 899 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for H.B. Fuller.

Approach 2: H.B. Fuller Price vs Earnings

For profitable companies like H.B. Fuller, the Price-to-Earnings (PE) ratio is a widely used metric to judge whether a stock looks reasonably priced. The PE ratio helps investors compare a company's current share price to its per-share earnings. The lower the ratio, the less you are paying for each dollar of profit generated. Naturally, businesses with faster growth prospects or lower risk deserve higher PE ratios, while slower-growing or riskier companies tend to trade at lower multiples.

At the moment, H.B. Fuller trades at a PE of 26.5x. This is just above the average multiple for chemical industry peers (22.9x) and closely aligned with the group’s peer average of 27.5x. While these benchmarks provide context, they do not take into account every factor that might be specific to H.B. Fuller, such as its earnings growth, risks, or profit margins.

This is where Simply Wall St's “Fair Ratio” comes in. The Fair Ratio is a proprietary metric that combines multiple factors, including growth forecasts, risk profile, profitability, industry, and company size, to estimate the multiple you would actually expect to pay for a business like H.B. Fuller. Because it goes further than a basic peer or industry comparison, the Fair Ratio often provides a more tailored and accurate valuation signal. For H.B. Fuller, the Fair Ratio stands at 24.4x versus the current multiple of 26.5x, putting it only modestly above the fair value range.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1418 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your H.B. Fuller Narrative

Earlier, we mentioned that there is an even better way to understand valuation. Let’s introduce you to Narratives, a powerful and user-friendly tool available on Simply Wall St’s Community page that ties your unique view of a company directly to a financial forecast and fair value.

A Narrative is more than just numbers; it is the story you tell about a company’s future. By inputting your assumptions about H.B. Fuller’s future revenue growth, earnings, and profit margins, you create a living perspective that connects the business’s journey to an estimated fair value. This process makes valuation personal and dynamic, helping investors go beyond standard models to express why they believe the stock is worth buying, holding, or selling.

Narratives are accessible to everyone and used by millions of investors, allowing you to easily compare your fair value to the current share price and make better decisions with confidence. When new information arises, such as earnings surprises, strategic acquisitions, or industry headwinds, your Narrative updates instantly. This ensures you always have the most relevant outlook at your fingertips.

For example, some H.B. Fuller Narratives are built on confidence in margin expansion and strategic acquisitions, generating bullish price targets as high as $75.0. More cautious analysts, factoring in ongoing risks to demand, currently project a target as low as $54.0.

Do you think there's more to the story for H.B. Fuller? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.