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HB Fuller (FUL) Downgraded to Strong Sell on Drab Prospects

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Zacks Investment Research downgraded HB Fuller Co.FUL to a Zacks Rank #5 (Strong Sell) on Sep 29, 2015. Going by the Zacks model, companies holding a Zacks Rank #5 have strong chances of underperforming the broader market in the near term.

Why the Downgrade?

HB Fuller's third-quarter fiscal 2015 results (ended Aug 2015) disappointed investors and the market at large, with its share price down by 5.3% since Sep 23. The company's earnings of 61 cents per share came in below the Zacks Consensus Estimate of 69 cents.

Revenues edged down 0.5% year over year as 6.7% gain from higher volumes and prices were more than offset by 7.2% negative impact from foreign currency translations. HB Fuller's businesses in the Americas were weak, with sales declining 7.9% year over year.

For fiscal 2015, HB Fuller lowered its revenue guidance to $2.075 billion from the earlier projection of $2.1 billion primarily due to weakness in the American businesses and higher tax rate. Adjusted earnings are anticipated at approximately $2.23 per share, down from the prior forecast of $2.45 per share.

Weak results and outlook have made investors dubious on HB Fuller's growth prospects. Over the last 7 days, the Zacks Consensus Estimate for the stock has decreased 8.3% to $2.22 per share for fiscal 2015 and 7.7% to $2.75 for fiscal 2016; while the same for fourth quarter was down 14.8% to 69 cents. Also, the company has an Earnings ESP of -1.82% for fiscal 2016.

Stocks to Consider

HB Fuller currently has a $1.7-billion market capitalization. Better-ranked stocks in the chemical industry include Trinseo SA TSE , Air Products & Chemicals Inc. APD and Israel Chemicals Ltd. ICL . While Trinseo SA sports a Zacks Rank #1 (Strong Buy), both Air Products & Chemicals and Israel Chemicals carry a Zacks Rank #2 (Buy).

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

AIR PRODS & CHE (APD): Free Stock Analysis Report

FULLER(HB) CO (FUL): Free Stock Analysis Report

TRINSEO SA (TSE): Free Stock Analysis Report

ISRAEL CHEM LTD (ICL): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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