H.B. Fuller Company (NYSE:FUL) last week reported its latest first-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations.       The result was positive overall - although revenues of US$810m were in line with what the analysts predicted, H.B. Fuller surprised by delivering a statutory profit of US$0.55 per share, modestly greater than expected.     Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual.  We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

NYSE:FUL Earnings and Revenue Growth April 1st 2024

Taking into account the latest results, the current consensus from H.B. Fuller's six analysts is for revenues of US$3.62b in 2024. This would reflect a reasonable 3.2% increase on its revenue over the past 12 months.       Statutory earnings per share are predicted to shoot up 36% to US$3.84.        Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.63b and earnings per share (EPS) of US$3.62 in 2024.        The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.    

There's been no major changes to the consensus price target of US$90.50, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation.        Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation.  Currently, the most bullish analyst values H.B. Fuller at US$115 per share, while the most bearish prices it at US$70.00.   There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.    

Of course, another way to look at these forecasts is to place them into context against the industry itself.     It's pretty clear that there is an expectation that H.B. Fuller's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 4.2% growth on an annualised basis. This is compared to a historical growth rate of 6.0% over the past five years.    Compare this to the 127 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 4.5% per year.  Factoring in the forecast slowdown in growth, it looks like H.B. Fuller is forecast to grow at about the same rate as the wider industry.    

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around H.B. Fuller's earnings potential next year.        They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry.       There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.  

With that said, the long-term trajectory of the company's earnings is a lot more important than next year.   We have estimates - from multiple H.B. Fuller analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for H.B. Fuller that you need to take into consideration.  

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