Global Hunter Securities Starts HB Fuller (FUL) at Accumulate

Global Hunter Securities initiates coverage on HB Fuller (NYSE: FUL) with a Accumulate rating and a price target of $48.00.

Analyst Michael Harrison commented, "FUL remains a turnaround in progress, nearing the optimization stage of restructuring efforts and recovering from SAP disruptions during FY14. Continued operational improvements coupled with renewed focus on share gains and leveraging recent acquisitions should generate sustained margin improvement, in our view. Adhesives play a critical role in making products lighter, smaller and more durable as they replace fasteners in a wide range of applications, driving GDP-plus growth. We also believe a global player such as FUL can create value by consolidating regional players (as it has with Forbo and Tonsan). With strong free-cash generation (8% FY15 FCF yield), we expect FUL to pay down debt near term and deploy future cash flow on M&A and share repurchases. We are initiating coverage with an Accumulate rating and a $48 price target, which is based on 9.1x our FTM EBITDA estimate (starting with Q3:16). This is in line with current valuation of 9.1x FTM EBITDA, and we believe there could be room for multiple expansion if FUL can return to organic volume growth and deliver on margin-improvement targets."

For an analyst ratings summary and ratings history on HB Fuller click here. For more ratings news on HB Fuller click here.

Shares of HB Fuller closed at $40.69 yesterday.

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