Citi Starts HB Fuller (FUL) at Neutral, 'Look for a Better Entry Point'

Citi analyst Patrick Cunningham initiates coverage on HB Fuller (NYSE: FUL) with a Neutral rating and a price target of $78.00.

The analyst comments "We initiate FUL at Neutral with a $78 target price. Destocking in HHC and CA has weighed on FUL volumes for 1H23 and we see risk of spillover in 2H23 and weaker primary demand. We remain positive on the portfolio shift to more specialty products through organic growth and acquisitions which should support continued margin expansion. However, we are waiting to see progress on the announced restructuring and incremental synergies unlocked from bolt-on acquisitions as FUL navigates the current macro; Price/cost benefit of $130-160mm should support margins as RM costs come down, but we see some risk in operating leverage to realize the full margin benefit. Overall, we see short-term symmetric risk/reward and look for opportunities to turn more positive on organic recovery & synergy execution."

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 $69.22 yesterday.

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