FBIN

We rate Fortune Brands Innovations, Inc. (FBIN) as a Reduce with a composite score of 44.1/100 at a current price of $56.16. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.

The rating is primarily driven by strength in value (51th percentile) and quality (49th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (30th percentile) and momentum (33th percentile) tempers our overall conviction. We assign a No Moat rating (34/100), High uncertainty, and Standard capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

Fortune Brands Innovations, Inc. holds a top-quartile position (#0 of 50) within the Construction sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 44.1/100 places it at rank #2941 in our full 7,333-stock universe. At $6.8B in market capitalization, Fortune Brands Innovations, Inc. is a mid-cap player in the Construction space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue contraction of -7% combined with momentum at the 33th percentile paints a cautious picture of the near-term business outlook. The market appears to be pricing in continued challenges, and a catalyst for reversal is not clearly visible from current data.

The margin cascade tells an important story: gross margins of 45% (+21.3pp vs sector) narrow to operating margins of 13% (+5.7pp vs sector) and net margins of 7.8%, yielding a gross-to-net conversion rate of 17%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.

At a current price of $56.16, Fortune Brands Innovations, Inc. is trading near fair value based on current fundamentals. Our value factor score of 51/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 18.2x (roughly in line with the sector median of 19.1x), EV/EBITDA of 14.5x (at a premium), P/B of 2.7x, P/S of 1.4x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a High uncertainty rating to Fortune Brands Innovations, Inc.. Key risk factors include . The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

We identify no major risk factors at this time. The company's stability factor sits at the 42th percentile with quality at the 49th percentile, both of which support our low-risk assessment. The absence of material leverage, profitability, or volatility concerns reduces the likelihood of a permanent capital loss scenario.

Key risk mitigants include: healthy gross margins of 45% provide a buffer against cost pressures. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.

We rate Fortune Brands Innovations, Inc.'s capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 15.1%, and the balance sheet is managed within acceptable parameters (D/E: 91%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; Fortune Brands Innovations, Inc. falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 1.86% dividend yield provides some income return, but the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, Fortune Brands Innovations, Inc. receives a Reduce rating with a composite score of 44.1/100 (rank #2941 of 7,333). Our quantitative framework assigns a No Moat (34/100, trend: stable), High uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 41/100.

Our analysis does not support a constructive view on Fortune Brands Innovations, Inc. at this time. The combination of limited competitive advantages, high uncertainty, and standard capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.