Fortune Brands Innovations, Inc. (FBIN): what the price requires
At today's price, Fortune Brands Innovations, Inc. (FBIN) is priced for +15.2% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-19 · Source: https://boothcheck.com/report/FBIN
Headline
| Field | Value |
|---|---|
| Ticker | FBIN |
| Company | Fortune Brands Innovations, Inc. |
| Current price | $50.27/sh |
| Composition | United States 84% / China 3% / Canada 8% / Other international 5% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 2.9% |
| Operating margin today | 10.3% |
| Margin compression implied | -7.4pp |
| Implied growth | 15.2% |
| Multiple paid | 19x operating income |
The operating-margin requirement is derived from the framework's value band at year 11, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 9.2% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.8pp.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.02σ |
| cohort percentile (of 74 peers) | 55 |
| sustained it ~5 years at this level | 44% |
| implied end-window share | 0% |
Valuation X-Ray
Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.85x | 5 | expensive |
| Earnings | 4.26x | 4 | expensive |
| Relative | 1.48x | 3 | expensive |
| Growth | 1.60x | 3 | expensive |
Families that call it expensive: Asset, Earnings, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.4%); the inversion above states its own rate.
Per-Model Detail (n=15)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $22.15 | 2.27x | yes | FCF base $0.3B, growth -2% (input: historical growth), terminal g 0.5%, WACC 6.4%, 5yr projection |
| DCF Exit Multiple | Growth | $49.38 | 1.02x | yes | Exit EV/EBITDA: 15.5x / 17.5x / 19.5x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $33.95 | 1.48x | yes | P/E 18x (static sector reference · 2026-04), scenarios: 15.2x / 18.0x / 20.8x (bear / base = reference held flat / bull), EV/EBITDA 12x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $24.43 | 2.06x | yes | BV/sh $19.61, ROE (TTM) 11.5%, ke 9.3% |
| Two-Stage Excess Return | Asset | $27.14 | 1.85x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $31.45 | 1.60x | yes | Rev $4.4B, growth -2% (input: historical growth; tapered), Terminal P/S: 1.1x / 1.4x / 1.6x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $51.53 | 0.98x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.78B × (1−28%) / WACC 6.4% → EPV (no growth) |
| Residual Income | Asset | $27.67 | 1.82x | yes | BV $19.61 + 5yr PV of (ROE (TTM) 11.5% − Kₑ 9.3%) × BV; BV grows 7.5%/yr |
| Graham Number | Asset | $31.51 | 1.60x | yes | √(22.5 × EPS $2.25 × BVPS $19.61) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $27.40 | 1.83x | yes | EBITDA $0.50B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | $7.78 | 6.46x | yes | FCF $339.9M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $6.45 | 7.79x | yes | SBC-adj FCF $0.33B (FCF $0.34B − SBC $0.01B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $1.89 | 26.60x | yes | EPS $2.25 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median) |
| ROIC-Justified P/B | Asset | $2.58 | 19.48x | yes | BV $19.61 × (ROIC 0.8% / WACC 6.4%) |
| P/Sales Sector | Relative | $92.38 | 0.54x | yes | Revenue $4.44B × sector P/S 2.5x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $24.32 | 2.07x | yes | EPS $2.25 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $2.5b |
| Net debt / NOPAT (after-tax) | 7.65x |
| Net debt / operating income (pre-tax) | 5.48x |
| Interest coverage | 4.0x |
| Share count CAGR (buyback) | -6.6% |
| Burning cash | no |
Bullet Takeaways
At $42.40 Fortune Brands trades at about 17x company-wide operating income, implying roughly 10.2% operating growth a year; only the relative-multiple family reaches the price while the asset, earnings-power, and growth-DCF families all read it as expensive, so a peer comparison is the lone support.
Q1 2026 was weak: sales fell 2% to $1.0 billion, operating income dropped 18%, and adjusted EPS fell 20% to $0.53, with full-year guidance reset lower; the case rests on a second-half cost-savings ramp and a housing recovery rather than current momentum.
The structural risk is channel concentration, with sales to The Home Depot and Lowe's about 19% of net sales, giving those retailers leverage and a private-label substitution path; net debt near $2.5 billion (interest coverage about 4x) amplifies the outcome either way.
Bull Case
At $42.40 (June 27, 2026), Fortune Brands sits above where most of its valuation methods land, and the pattern of that premium is the first thing to understand. Only the relative-multiple family reaches the price; the asset, earnings-power, and growth-DCF families all read the stock as expensive. In plain terms, the market is paying a peer-comparable multiple for a home-and-security products maker whose own cash-flow and asset frames say less. The bull case is that the peer multiple is the right one because the franchise quality and the eventual housing recovery justify it, and that the trough earnings the static frames capitalize understate normalized earning power.
The business is a collection of branded home, security, and water products sold largely through the big retail channel. The filing notes the segment sells through independent manufacturer's representatives to wholesalers, home centers, and mass merchandisers, with sales to The Home Depot and Lowe's comprising roughly 19% of net sales (accession 0000950170-25-026763). That channel concentration cuts two ways, but it also means brand share at the two largest home-improvement retailers in the country, a real distribution advantage. Management is steering toward higher-margin, tech-enabled products, including connected water management and smart locks on a subscription model, and has cited share gains and long-term contracts in Water with major builders and retail partners.
The implied bar is not heroic. At about 17x company-wide operating income the price embeds roughly 10.2% operating growth a year, which the inversion reads as within range, and only about 54% of comparable fast-growers historically sustained that pace, so it is a coin-flip-plus bet rather than a moonshot. If the second-half cost savings management is guiding to land and the housing market firms, the normalized earnings power that the asset and earnings frames are missing comes back into view, and the peer multiple looks justified rather than generous.
Bear Case
The competitive pressure on Fortune Brands runs straight through its biggest customers. Its own filing discloses that sales to The Home Depot and Lowe's together make up about 19% of net sales (accession 0000950170-25-026763). When two retailers control that much of your volume, they control shelf space, promotion, and increasingly private-label substitution. Home centers have spent years building their own brands in faucets, locks, and plumbing fittings precisely because they can see the margin in the categories Fortune Brands sells. The disruption is not a flashy new entrant; it is the customer steadily becoming the competitor, and a channel-concentrated supplier has limited leverage to resist it.
The recent results show the pressure is already biting. First-quarter 2026 sales fell 2% to $1.0 billion, operating income dropped 18%, GAAP EPS fell 52% to $0.20, and adjusted EPS fell 20% to $0.53, with the company resetting full-year guidance lower and citing inflation and market headwinds. Management is leaning on cost savings and a second-half margin recovery, which is the kind of self-help that works only if demand cooperates. There has also been reported leadership uncertainty, which is not what a company wants while it is asking investors to underwrite a turn.
The valuation makes the setup precarious. Only the relative-multiple family reaches the price; the asset, earnings-power, and growth-DCF families all say expensive. That means the stock is being held up by a peer comparison while its own cash-flow and asset frames disagree, and the implied roughly 10.2% operating growth is a bar only about half of comparable fast-growers have historically cleared. On the balance sheet, net debt sits near $2.5 billion with interest coverage around 4x and net-debt-to-operating-income above 5x, so leverage is meaningful while earnings are declining. If the housing recovery is delayed, if the home centers keep pressing on private label, or if the cost savings underwhelm, the one family supporting the price loses its footing and the stock has the asset and earnings-power floor, which sits below today's level, to fall toward.
Valuation
Fortune Brands trades at about 17x company-wide operating income, which inverts to roughly 10.2% operating-income growth a year for five years at a 9% cost of capital. The inversion reads that as within range, though it notes only about 54% of comparable fast-growers historically sustained that pace, so it is a better-than-even bet rather than a comfortable one.
The family pattern is the key tension. Only the relative-multiple family reaches the price; the asset, earnings-power, and growth-DCF families all read the stock as expensive. That is the profile of a name being supported by a peer comparison while its own cash-flow and asset frames disagree. The bull reading is that the trough earnings these static frames capitalize understate normalized power, so the peer multiple is appropriate; the bear reading is that the peer multiple is simply the last frame holding the price up while the fundamentals deteriorate.
The honest read: this is a cyclical home-products franchise priced for a recovery that has not yet shown up in the numbers. The first quarter saw sales down 2% and adjusted EPS down 20%, with guidance reset lower, so the implied 10.2% growth is a bet on a second-half cost-savings ramp and an eventual housing thaw rather than current momentum. Net debt near $2.5 billion (interest coverage about 4x) means the leverage amplifies whichever way the recovery breaks. The cleaner way to weigh the price is against management's reset full-year guidance and the second-half margin path, not the trough trailing quarter.
Catalysts
The key recent catalyst was a weak first-quarter 2026 report. Fortune Brands posted sales of $1.0 billion, down 2% year over year, operating income down 18%, GAAP EPS of $0.20 (down 52%), and adjusted EPS of $0.53 (down 20%), citing inflation and market headwinds. Coverage also flagged leadership uncertainty alongside the soft print (QuiverQuant, Yahoo Finance).
In response, management reset full-year 2026 guidance lower, with sales expected in line with the market, and ramped up cost-savings initiatives, guiding to margin improvement in the second half. The strategic message is a transition toward higher-margin, tech-enabled products, including connected water management, smart locks, and a subscription-based recurring-revenue model, with stated share gains and long-term Water contracts with major builders and retail partners (Fortune Brands 8-K, stockanalysis).
The catalysts ahead are the second-half margin recovery and the housing backdrop. The thesis needs the cost-savings program to deliver the guided margin improvement and the residential repair-and-remodel market to firm; a continued demand soft patch, further private-label pressure from the home centers, or another guidance cut would be the clearest near-term risks. The next quarterly print is the test of whether the second-half recovery is materializing on schedule (MarketBeat, Yahoo Finance).
Peer Cohorts (Per Segment, With Filing Citations)
Water (reported)
- AOS (A. O. Smith Corporation)
- FY2025 10-K: …lines of residential and commercial gas and electric water heaters, boilers, heat pumps, tanks and water treatment products. Both segments primarily manufacture and market in their respective regions of the world. Our Rest of World segment is primarily comprised of China, India, and Europe. NORTH AMERICA Sales in our…
- FY2025 10-K: …in new construction. We anticipate that commercial water heater industry volumes will increase mid-single digits in 2026 after growing approximately five percent in 2025. We believe that the 2026 growth will come from the buy ahead of products that will be eliminated as a part of the DOE regulatory change for…
- MWA (MUELLER WATER PRODUCTS, INC.)
- FY2025 10-K: …is in the process of transitioning from manually read meters to electronically read meters; however, we expect this transition to be relatively slow and that many end users will be reluctant to adopt brands other than their historically preferred brand. Our principal competitors in water metering products and systems…
- FY2025 10-K: …Index to Financial Statements Water Management Solutions Net sales for 2025 were $604.8 million as compared with $559.2 million in the prior year, an increase of $45.6 million or 8.2%, primarily as a result of higher sales volumes in hydrants and repair and installation products as well as higher pricing across most…
- WMS (ADVANCED DRAINAGE SYSTEMS, INC.)
- FY2025 10-K: …transport products to our customers and end users and to promote faster product shipments due to our proximity to the delivery location. The optimized design of our Infiltrator chambers and tanks provides the ability to nest products, enabling us to manufacture products from one location and efficiently ship…
- FY2025 10-K: …us to maintain more customer touch points and interaction than any of our competitors. SEASONALITY Historically, sales of our products have been higher in the first and second quarters of each fiscal year due to favorable weather and longer daylight conditions accelerating construction activity during these periods.…
- ZWS (ZURN ELKAY WATER SOLUTIONS CORPORATION)
- FY2025 10-K: …improvements in growth, productivity, cost reduction and asset efficiency and believe there are ongoing opportunities to improve our performance. 5 Our Business Zurn Elkay is a growth-oriented, pure-play water management business that designs, procures, manufactures, and markets what we believe to be the broadest…
- FY2025 10-K: December 31, 2025. Quantitative and Qualitative Disclosures about Market Risk . This section discusses our exposure to potential losses arising from adverse changes in interest rates and foreign exchange rates. 25 Company Overview We are a growth-oriented, pure-play water management business that designs, procures,…
- HAYW (Hayward Holdings, Inc.)
- FY2025 10-K: …in the United States. Customer shipments in Europe are fulfilled through our distribution centers in France or Spain, and Australia is served primarily through third-party distribution. The remaining countries in this segment are predominantly served through U.S.-based regional managers who work with established…
- FY2025 10-K: …pricing and contractual terms. We believe our extensive product portfolio enables us to meet both residential and commercial needs, which creates a "one-stop-shop" for many of our customers. Some of our competitors, in particular smaller companies, compete based primarily on price and local relationships, especially…
Outdoors (reported)
- TREX (Trex Company, Inc.)
- FY2025 10-K: …as an alternative to wood decking. We are a licensor in a number of licensing agreements with third parties to manufacture and sell products under the Trex trademark. Our licensed products are: Trex ® Outdoor Furniture A line of outdoor furniture products manufactured and sold by PolyWood, Inc. Trex ® RainEscape ® ,…
- FY2025 10-K: …and economic trends relating to our industry and similar matters are forward-looking statements. These statements can sometimes be identified by our use of forward-looking words such as "believe," "may," "will," "anticipate," "estimate," "expect," "intend" or similar expressions. We cannot promise you that our…
- UFPI (UFP INDUSTRIES, INC.)
- FY2025 10-K: …with environmental regulations. If additional laws and regulations are enacted, which restrict our ability to manufacture and market our products, including our treated lumber products, it could adversely affect our sales and profits. Changes in the interpretation of existing laws could also adversely impact our…
- FY2025 10-K: …have given the Company manufacturing capability in alternate material components such as metal trusses, sheathed and pre-finished light gauge metal wall panels and aluminum balconies, decks and rail accessories. We also provide framing services for builders in certain regional markets in which we erect the wood…
- LPX (LOUISIANA-PACIFIC CORPORATION)
- FY2025 10-K: …Sheathing, LP WeatherLogic ® Air & Water Barrier, LP ® TechShield ® Radiant Barrier, LP Legacy ® Premium Sub-Flooring, and LP ® TopNotch ® 350 Durable Sub-Flooring). Our LP Structural Solutions products are engineered to provide a variety of features such as fire resistance, enhanced water and moisture protection,…
- FY2025 10-K: …with differing tax rates, and the valuation of deferred tax assets. Additional information concerning tax matters is set forth under "Risk Factors - Legal and Regulatory Risk Factors - Regulatory and statutory changes applicable to us or our customers, including changes in effective tax rates or tax law, could…
- JHX (JAMES HARDIE INDUSTRIES PLC)
- (no filing in the citation store)
- MAS (Masco Corporation)
- FY2025 10-K: …Products segment, which are aggregated by product similarity. Our Decorative Architectural Products segment is impacted by seasonality and normally experiences stronger sales during the second and third calendar quarters, corresponding with the peak season for repair and remodel activity. 2 Plumbing Products The…
- FY2025 10-K: …and other financial investments measured at amortized cost and the credit worthiness of customers on an on-going basis, including requiring the completion of credit applications and performing periodic reviews of our open accounts receivable. We record allowances for credit losses for estimated losses resulting from…
Security (reported)
- AOS (A. O. Smith Corporation)
- FY2025 10-K: …for our products, and commercial sectors, such as the restaurant and hospitality industries in which we have customers, may experience long-term shifts in consumer behavior which could negatively impact demand or capacity. In addition, the acceptance of remote work arrangements could negatively impact demand for…
- FY2025 10-K: …Security Officer (CISO) reports to our CDIO and is responsible for the protection and defense of our networks and systems and managing cybersecurity risk. He has over 20 years of experience in managing cybersecurity and related risks, including threat identification, incident response, and defense strategies. Our…
- AWI (ARMSTRONG WORLD INDUSTRIES, INC.)
- FY2025 10-K: …and secure information technology systems. We maintain data protection and privacy processes designed to reduce risk of unauthorized access, use or exfiltration of sensitive information. Our cybersecurity capabilities include network security, endpoint detection and response, identity controls, privileged access…
- FY2025 10-K: …using, transmitting and storing data is a vital aspect of our business operations. Information systems are inherently vulnerable to a range of cybersecurity threats that could potentially have a material impact on our strategy, financial condition, liquidity or results of operations. Cybersecurity Risk Management and…
- EXP (EAGLE MATERIALS INC.)
- FY2025 10-K: …issues, such as human error, or malicious acts or misconduct by employees or third-party vendors. There are also significant risks related to the use of remote networking services and technologies that enable remote work. Any breaches of our technology systems, or those of our vendors and customers, whether from…
- FY2025 10-K: …of IT experience, 34 years of which are specializing in cybersecurity practices. Our DIS holds numerous certifications including as an ISC 2 , Certified Information Systems Security Professional (CISSP), and ISACA Certified Information Security Manager (CISM). Our DIS also has extensive experience in architecting,…
- MAS (Masco Corporation)
- FY2025 10-K: . Management is responsible for identifying and assessing material cybersecurity risks on an ongoing basis and for developing, managing and implementing our cybersecurity program to assure that our potential cybersecurity risk exposures are monitored and appropriate mitigation measures are implemented. Our…
- FY2025 10-K: …with respect to Kilz branded primer products in the home improvement big box retail sales channel and across online only mass market retail marketplaces in the United States and in the retail sales channel in Canada. From time to time, certain of our other businesses grant product and/or brand exclusivity to our…
- OC (Owens Corning)
- FY2025 10-K: …and capacity of these systems. Our information technology systems, some of which are dependent on services provided by third parties, may be vulnerable to damage, interruption, or shutdown due to any number of causes outside of our control such as catastrophic events, natural disasters, fires, power outages, systems…
- FY2025 10-K: …However, advanced cybersecurity threats, such as malware, ransomware, and phishing attacks, attempts to access information, and other security breaches, are persistent and continue to evolve, making them increasingly difficult to identify and prevent. Protecting against these threats requires significant resources,…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.