On Thursday, Baird revised its outlook on Fortune Brands (NYSE: NYSE:FBIN), reducing the stock's price target to $90 from the previous $94 while maintaining a Neutral rating. The adjustment follows the company's mixed third-quarter results, which included weaker sales but better margins. The full-year guidance was also revised downward, with the fourth quarter's implied earnings per share expected to fall short of market expectations.
The report attributed the weaker sales to a combination of factors, including softer end markets, additional inventory reductions, and slower progress in digital initiatives. Despite the near-term sales impact, Fortune Brands management remains optimistic about the digital opportunities, attributing the slow ramp-up to internal learning processes without altering the long-term outlook.
As a result of these factors, Baird anticipates that Fortune Brands shares may experience a decline in trading on Friday. The firm's stance remains Neutral, as it awaits signs of improvement in end markets or catalysts that could lead to upward revisions in estimates.
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