Value
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.9 |
| P/S | 9.4 |
| EV/EBITDA | 5.3 |
| Fwd P/E | 8.3 |
| PEG | 4.6 |
| Analyst target | 4.0 |
- ▸Forward P/E: 14.0x
- ▸PEG: 1.88
FBIN · Why this verdict
Why Fortune Brands Innovations (FBIN) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Fortune Brands Innovations is trading at a level where upside to the analyst price target has been largely exhausted, while two recent earnings misses and a confirmed downtrend in price argue for caution; the risk/reward does not support adding exposure at current prices.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has missed earnings estimates in two of the three most recent quarters — including a 13.7% shortfall in the second-most-recent period — with the oldest quarter in the trailing four delivering the only beat; this pattern of under-delivery raises doubt about management's ability to guide and execute consistently in the current operating environment. Earnings | Over the next 12 months, EPS results begin to beat consensus estimates by a positive margin for at least two consecutive quarters, signaling a return to reliable execution. | ↓Deteriorating |
| CounterDeclining revenue of approximately negative 2% may reflect a cyclical trough rather than structural deterioration, and the single recent beat suggests earnings power has not fully evaporated; a housing or building products recovery could restore both top-line growth and earnings delivery. | ||
The stock is trading below its 200-day moving average, which carries a negative slope of roughly 5% per month, meeting the technical definition of a confirmed downtrend; an overbought reading in this context suggests the current bounce may be a bear-market rally rather than a sustainable reversal. Momentum breakdown | Over the next 12 months, the stock reclaims and holds above the 200-day moving average with the slope turning flat or positive, confirming a genuine trend change. | ↓Deteriorating |
| CounterThe MACD has been improving and on-balance volume is rising, which can precede a genuine trend reversal even while the stock remains below the 200-day average; momentum indicators diverging positively from price is an early signal that selling pressure is exhausting. | ||
With the stock just below the resistance price target and only 2.6% of potential upside remaining against approximately 7% of downside exposure, the risk/reward of 0.37-to-1 is well below any reasonable threshold for new entry; the setup does not reward buyers at current levels. Price targets | Over the next 12 months, a meaningful pullback creates at least 10% headroom to the take-profit target, restoring an acceptable entry geometry. | Tripped→Stable |
| CounterA stock near its analyst price target has already reflected positive price discovery; if fundamentals stabilize and revenue trends reverse, analyst targets may be revised upward, widening the potential upside from the current price. | ||
Options traders are positioning defensively, with a put/call ratio of 2.23 and implied volatility at 96%, signaling that the market is pricing in a high probability of further downside; this level of hedging activity is unusual and warrants caution for anyone considering new exposure. Risk breakdown | Over the next 12 months, the put/call ratio falls below 1.0 and implied volatility normalizes toward the sector average as the stock stabilizes. | ↓Deteriorating |
| CounterElevated put/call ratios can also reflect hedging by existing long holders rather than outright bearish speculation, and very high implied volatility may compress quickly once near-term uncertainty resolves, potentially producing a tailwind for the stock. | ||
The company has missed earnings estimates in two of the three most recent quarters — including a 13.7% shortfall in the second-most-recent period — with the oldest quarter in the trailing four delivering the only beat; this pattern of under-delivery raises doubt about management's ability to guide and execute consistently in the current operating environment.
↓DeterioratingEarnings
- Expectation
- Over the next 12 months, EPS results begin to beat consensus estimates by a positive margin for at least two consecutive quarters, signaling a return to reliable execution.
CounterDeclining revenue of approximately negative 2% may reflect a cyclical trough rather than structural deterioration, and the single recent beat suggests earnings power has not fully evaporated; a housing or building products recovery could restore both top-line growth and earnings delivery.
The stock is trading below its 200-day moving average, which carries a negative slope of roughly 5% per month, meeting the technical definition of a confirmed downtrend; an overbought reading in this context suggests the current bounce may be a bear-market rally rather than a sustainable reversal.
↓DeterioratingMomentum breakdown
- Expectation
- Over the next 12 months, the stock reclaims and holds above the 200-day moving average with the slope turning flat or positive, confirming a genuine trend change.
CounterThe MACD has been improving and on-balance volume is rising, which can precede a genuine trend reversal even while the stock remains below the 200-day average; momentum indicators diverging positively from price is an early signal that selling pressure is exhausting.
With the stock just below the resistance price target and only 2.6% of potential upside remaining against approximately 7% of downside exposure, the risk/reward of 0.37-to-1 is well below any reasonable threshold for new entry; the setup does not reward buyers at current levels.
Tripped→StablePrice targets
- Expectation
- Over the next 12 months, a meaningful pullback creates at least 10% headroom to the take-profit target, restoring an acceptable entry geometry.
CounterA stock near its analyst price target has already reflected positive price discovery; if fundamentals stabilize and revenue trends reverse, analyst targets may be revised upward, widening the potential upside from the current price.
Options traders are positioning defensively, with a put/call ratio of 2.23 and implied volatility at 96%, signaling that the market is pricing in a high probability of further downside; this level of hedging activity is unusual and warrants caution for anyone considering new exposure.
↓DeterioratingRisk breakdown
- Expectation
- Over the next 12 months, the put/call ratio falls below 1.0 and implied volatility normalizes toward the sector average as the stock stabilizes.
CounterElevated put/call ratios can also reflect hedging by existing long holders rather than outright bearish speculation, and very high implied volatility may compress quickly once near-term uncertainty resolves, potentially producing a tailwind for the stock.
Per-dimension breakdown
Quality
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.9 |
| ROA | 4.0 |
| Gross margin | 5.0 |
| Op margin | 2.6 |
| Net margin | 3.1 |
| Current ratio | 7.4 |
| FCF quality | 8.0 |
| Moat | 3.9 |
| Piotroski F | 6.7 |
- ▸No competitive moat
Growth
1.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.0 |
| EPS growth | 0.0 |
- ▸Declining revenue: -2%
Momentum
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 8.0 |
| Volume | 0.3 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 5.7 |
| erm sentiment | 5.7 |
Insider
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 8.0 |
| insider conviction | 8.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Notable insider buying — $28,653,958 (0.468% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.0 |
| quality rank | 4.8 |
| growth rank | 1.9 |
Technical
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.6 |
| support resistance | 4.0 |
| 52w position | 6.0 |
Risk (lower is worse)
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.1 |
| days to cover | 7.3 |
| volatility | 2.2 |
| put call | 0.0 |
| implied vol | 3.0 |
| beta | 5.5 |
| debt equity | 4.5 |
- ▸Elevated put/call: 3.43
- ▸High IV: 62%
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 1.1 |
| earnings timing | 5.0 |
| surprise avg | 0.9 |
| dividend safety | 8.0 |
- ▸Earnings concerns: 1B/2M
- ▸Earnings in 10 days
- ▸Dividend aristocrat: 2.1% yield
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (4)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:3.0<4.5
- ASYMMETRY:-0.8=NEGATIVE
- DEATH_CROSS:HARD_BLOCK
Warning (2)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
- EARNINGS_PROXIMITY:10d<=14d (soft)
Reward-to-Risk
-0.77
Upside
-8.8%
Downside
11.4%
Sizing output
AVOID
SetupRange Bound — RSI 49 mid-range, Bollinger mid-band
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.37>1.3
Investment implication
The F-path SELL output reflects an overall score of 4.0 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Insider at 8.2) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.0<4.5, ASYMMETRY:-0.8=NEGATIVE, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is -0.77 — supplementary context, not the trigger for this path.
The strongest dimensions are Insider at 8.2, Value at 6.1, and Sentiment at 5.4; the weakest are Growth at 1.0, Momentum at 3.0, and Risk (lower is worse) at 3.9. The V9 engine flagged 3 failed gates with 2 warnings, producing an asymmetric reward-to-risk of -0.77 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Consecutive Earnings Misses
Trip ifEPS surprise exceeds 3% for 2 consecutive quarters.
- P2Confirmed Price Downtrend
Trip ifStock closes and holds above the 200-day moving average for 3 consecutive weeks.
- P3Unfavorable Entry GeometryTripped
Trip ifUpside to the resistance target exceeds 10% from current price.
- P4Bearish Options Positioning
Trip ifPut/call ratio falls below 1.0.