Fortune Brands Innovations, Inc. (FBIN): what the price assumes

In the published model solve dated 2026-Q2, anchored at $43.11, Fortune Brands Innovations, Inc. (FBIN) is priced for +7.8% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-26.

Generated: 2026-09-07 · Exported: 2026-09-09 · Source: https://boothcheck.com/report/FBIN

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 11: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 8.8% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

Every valuation family lands below the price. The price therefore sits 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.

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 6.1%); the inversion above states its own rate.

Per-Model Detail (n=12)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Bullet Takeaways

• Three brand groups sold into American kitchens, bathrooms and back yards, with 3,742.1 million dollars of 2025 sales in the United States out of 4,463.2 million worldwide, are currently earning roughly a third less than they did the year before.

• Borrowings are the live constraint rather than demand: net borrowings near 2.5 billion dollars sit against a trailing operating result under half a billion, and the revolving credit agreement carries a floor requiring earnings before interest, taxes, depreciation and amortisation to stay at a ratio of 3.0 to 1.0 against interest expense.

• Two dated decisions now sit ahead of the numbers: a new chief executive took the role on June 29, 2026, and a strategic review of the Fiberon decking business opened May 27, 2026, with the next quarterly report scheduled for August 4, 2026.

Bull Case

Read the recent quarters in order and the direction is not in dispute. Net sales came to 4,463.2 million dollars in 2025 against 4,609.0 million in 2024, and the operating result fell by 221.8 million dollars, a drop the annual report sizes at 30.1%. The first quarter of 2026 carried it forward: net sales of 1,011.3 million dollars against 1,033.1 million a year earlier. Any bull case that opens somewhere else is dodging.

The argument is about what sits inside that decline. Asset impairment charges accounted for 53.6 million dollars of it, and a further 21.1 million came from charges, net of insurance recovery, relating to a fire in part of a manufacturing facility. Neither of those describes how the business converts a faucet into profit. Set the trailing result against the five-year average operating figure the normalizing methods work from, roughly 720 million dollars, and the last twelve months sit about a third below the company's own recent through-cycle earning power.

What that earning power rests on is worth stating plainly, because a single bad year hides it. The company runs three groups, Water, Outdoors and Security, and sells overwhelmingly into one country: 3,742.1 million dollars of 2025 sales went to United States destinations, 344.1 million to Canada, 229.8 million across other international markets and 147.2 million to China. More importantly, the demand is not primarily new houses. The filing describes the U.S. market it serves as one that "consists of spending on both new home construction and repair and remodel activities within existing homes, with a substantial majority of the markets we serve consisting of repair and remodel spending". Remodel spending tracks the age and size of the existing housing stock, which moves far more slowly than housing starts do.

The category the largest segment competes in earns well. AOS reported an 18.5% operating margin in its own filings, MWA 19.2%, WMS 20.3% and HAYW 21.1%. Those are the economics available in water products, and the consolidated figure here sits below them partly because it carries two other segments and unallocated corporate cost that the segment figures exclude, as the annual report notes when it says "Segment operating income excludes unallocated corporate costs".

Meanwhile the cash kept arriving and management kept spending it on its own shares. Free cash flow ran 339.9 million dollars over the trailing year, on capital spending of roughly 103 million. Diluted weighted-average shares fell from 125.7 million in fiscal 2024 to 121.2 million in fiscal 2025, and stood at 120.2 million in the first quarter of 2026 against 123.0 million a year earlier. Over the four years to March 2026 the count has come down about 2.8% a year. Buying stock while your end market is soft is a decision that shows up in the count rather than in a press release.

On the cost side the response is already named and underway. The company describes itself as "working to mitigate the anticipated impacts of tariffs through a combination of supply chain actions, cost-out activities and strategic pricing actions across all of our channels and brands", alongside a manufacturing facility closure in Security and headcount reductions across all three segments. Whether that fully offsets is the open question. That it is happening is not.

Bear Case

The uncomfortable fact for a holder is that this did not get inexpensive by accident, and on the evidence it has not got inexpensive at all. Every family of valuation method lands under today's level, and the business behind them is contracting.

Begin with operating leverage running backwards. First-quarter 2026 net sales of 1,011.3 million dollars came in about 2% below the 1,033.1 million of a year earlier, which is a mild decline. The operating result over the same comparison fell from 97.0 million dollars to 60.2 million. Selling, general and administrative expenses went the other way, rising 12.0% in the quarter while sales fell. A two percent move at the top of the statement produced a drop of nearly two fifths at the operating line, and volume returning does not automatically unwind an expense base that grew while volume shrank.

The borrowings sit directly on top of that. Net borrowings run close to 2.5 billion dollars against a trailing operating result under half a billion, which is a little over five times operating profit. Interest expense over the trailing twelve months came to 113.1 million dollars, covered roughly four times. The revolving credit agreement sets a floor at a ratio of 3.0 to 1.0 measured on earnings before interest, taxes, depreciation and amortisation against interest expense, and the definition of that earnings figure explicitly adds back losses from asset impairments. Lenders write that clause when they expect impairments to happen.

Costs are still working against the gross line. The 2025 decline was driven by lower volume and by material cost inflation including tariff costs, and the company is candid that the escape route has a toll: raising prices to cover such increases "may negatively impact the competitiveness, and in turn market share, of our products". The destination table shows 147.2 million dollars of 2025 sales into China, but the tariff exposure the filing describes runs the other way, through the raw materials and components it buys.

The demand variable is the one nobody at the company controls. The annual report ties growth in its U.S. market to "consumer confidence, employment, wage growth, home prices, equity levels and rates", and separately lists among the triggers for writing assets down "actual new construction and repair and remodel growth rates that fall below our assumptions". That is precisely what happened in 2025, and 53.6 million dollars of asset impairment charges followed. A second year of assumptions falling short produces the same entry.

Set all of that against what the quote requires. Today's level pays roughly twenty times the trailing operating result and embeds operating profit compounding around 16% a year over a five-year stage. That pace is inside what this company has managed across a fuller cycle, which is exactly the difficulty: it needs the cycle to turn, not merely to stop falling. Of comparable fast growers, only about 43% sustained anything like that pace for five years, and there is no cushion in the frames if it does not arrive. The price sits about half again above the peer-multiple family, roughly three quarters above the forward-growth family, and a little under twice the asset-value family.

None of this argues the brands are weak; the filing's claim to "market-leading brands" is consistent with the water cohort's economics. It argues that a leveraged, housing-exposed manufacturer in the second year of a volume decline is being quoted above every frame that values it, on a requirement that needs its end market to turn rather than merely to stabilise.

Valuation

Today's level pays roughly twenty times company-wide operating income and embeds operating profit compounding about 16% a year over a five-year stage. Whether that reads as demanding or ordinary depends entirely on which year you measure from, and this is a company where that choice matters more than usual.

Measured from the trailing year it is demanding, because the trailing year is the weakest of the recent set. The 2025 operating result came to 516.1 million dollars on net sales of 4,463.2 million, after a fall the annual report sizes at 221.8 million dollars, or 30.1%. Measured instead against the five-year average operating figure of roughly 720 million dollars that the normalizing methods work from, the required pace looks less like growth and more like a return to a level already reached. Which of those two readings is right is the valuation question here, and nothing in the filings settles it.

The methods do not settle it either, though they cluster tightly. The price sits about half again above the peer-multiple family, roughly three quarters above the forward-growth family, and a little under twice the asset-value family. Only the earnings-power family sits far out, and it does so for a specific reason: two of its members capitalize free cash flow with no growth at all, which is a punishing test to run on a business at the bottom of its own cycle. The one method in that family which normalizes first, valuing the five-year average operating result as a perpetuity, lands nearer today's level than anything else in the set.

The cohort comparison is more informative at segment level than at company level, because the consolidated figure carries corporate cost the peers do not. Water competes against names earning in the high teens and low twenties: AOS at an 18.5% operating margin, WMS at 20.3%, HAYW at 21.1%. Outdoors competes across a much wider spread, with TREX at 22.1% and MAS at 16.6% at one end, UFPI at 5.4% and LPX at 4.8% at the other. The consolidated result runs below the water group, which is what a portfolio looks like when its largest business is healthy and its other two are not.

Solvency is where the recovery requirement acquires consequences. Net borrowings of about 2.5 billion dollars sit against a trailing operating result under half a billion, a little over five times operating profit, with coverage of roughly four times and a revolving agreement floor set at a ratio of 3.0 to 1.0. Free cash flow of 339.9 million dollars still funded a falling share count over the same stretch, with diluted weighted-average shares moving from 125.7 million in fiscal 2024 to 120.2 million in the first quarter of 2026. A recovery in volume repairs the operating result and the ratios together. Another year shaped like 2025 pressures both together.

Catalysts

The single largest change since the last quarterly filing is at the top. A new chief executive, Jesse Singh, took the role on June 29, 2026. New management arriving in the second year of a volume decline usually means portfolio decisions get made faster, and one is already in motion: the company opened a strategic review of its Fiberon composite decking business on May 27, 2026. Fiberon sits inside Outdoors, the segment that absorbed the bulk of last year's asset impairment charges, so a sale or a restructuring there would change the shape of the consolidated result more than its size.

The operating calendar is straightforward. First-quarter results were published May 7, 2026, showing net sales about 2% below the prior year, and the next report is scheduled for August 4, 2026. The board declared its quarterly dividend on July 20, 2026, which is worth noting only because a payout maintained through a down cycle is a statement about expected cash generation rather than about the current print.

The sell side has moved in one direction this month and by wide margins. Truist upgraded to Buy on June 25, 2026 with a target of 70 dollars; Goldman Sachs moved to 61 dollars from 50 on July 9; Bank of America to 44 dollars from 37 on July 12; and Barclays to 56 dollars from 41 on July 13. Four raises in under three weeks, landing anywhere between 44 and 70 dollars, is less a consensus than a shared view that the trough is behind and a complete disagreement about what the recovery is worth.

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.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• 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.