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Citi Stays On The Sidelines With Fortune Brands Home & Security

Citi Stays On The Sidelines With Fortune Brands Home & Security

Citi’s Will Randow believes Fortune Brands Home & Security Inc (NYSE: FBHS) is well positioned to benefit from a recovery in the U.S. housing market.

Randow initiated coverage of the company with a Neutral rating and price target of $65.

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The analyst explained that the price target represented a 4.5x premium to the current trading multiples of Fortune Brands’ peers.

“In our view, the premium is attributable to FBHS' stronger brand positioning (particularly in cabinets), investor perception of more consistent operating performance, and healthier EBITDA margins across FBHS' business portfolio,” Randow said.

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However, the analyst prefers to stay on the sidelines for now, stating that the stock appeared fairly value relative to the fundamentals.

Well Positioned

Randow also pointed out that Fortune Brands’ businesses were well positioned to benefit from a recovery in U.S. housing, since the cabinets and plumbing business “display high correlation coefficients to starts, as well as strong correlations to Existing Home Sales, private residential investment, and building permits.”

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Latest Ratings for FBHS

May 2021KeybancMaintainsOverweight
Apr 2021Truist SecuritiesMaintainsBuy
Mar 2021Wolfe ResearchInitiates Coverage OnOutperform

View More Analyst Ratings for FBHS
View the Latest Analyst Ratings


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