On 01 December 2018, H.B. Fuller Company (NYSE:FUL) announced its latest earnings update. Overall, analyst consensus outlook seem bearish, with profits predicted to drop by -3.9% next year relative to the past 5-year average growth rate of 13%. Presently, with latest-twelve-month earnings at US$171m, we should see this fall to US$165m by 2020. Below is a brief commentary on the longer term outlook the market has for H.B. Fuller. For those interested in more of an analysis of the company, you can research its fundamentals here.
What can we expect from H.B. Fuller in the longer term?
The view from 9 analysts over the next three years is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To get an idea of the overall earnings growth trend for FUL, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of US$171m and the final forecast of US$236m by 2022, the annual rate of growth for FUL’s earnings is 15%. This leads to an EPS of $4.59 in the final year of projections relative to the current EPS of $3.38. With a current profit margin of 5.6%, this movement will result in a margin of 7.2% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For H.B. Fuller, I’ve put together three relevant aspects you should further examine:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is H.B. Fuller worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether H.B. Fuller is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of H.B. Fuller? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.