Is There an Opportunity in Fortune Brands Innovations After Recent Share Slide in 2025?

If you have been watching Fortune Brands Innovations with curiosity or a hint of hesitation, you are not alone. Figuring out what to do next with this stock feels like a real-time case study, and there is nothing theoretical about the swings we have seen lately. The share price has slipped about 0.5% this week, and it has dipped a stark -13.1% in the past month. Year-to-date, the red ink only deepens, with shares off -21.8%. For those looking over a longer horizon, the picture is a little more mixed: while the past year has meant a bruising -38.1% decline, Fortune Brands Innovations managed a 13.4% gain over three years, even if the five-year return comes out to -25.6%.

Some of this volatility can be traced back to broader market jitters and shifting investor sentiment toward companies in the home and building products space. Recent macro developments have heightened both growth hopes and risk awareness for players like Fortune Brands. All of this has investors asking whether the current price is a buying opportunity, or if it is best left alone until the dust settles.

One thing worth noting, especially for valuation-minded readers: Fortune Brands Innovations flashes a striking value score of 6 out of 6, a perfect score based on six key valuation checks where the stock appears undervalued. That is a standout signal worth a closer look.

Let us break down the main approaches to stock valuation and see how Fortune Brands Innovations measures up. Keep reading, because there is an even more insightful angle on valuation that we will tackle at the end.

Why Fortune Brands Innovations is lagging behind its peers

Approach 1: Fortune Brands Innovations Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company’s intrinsic value by projecting its future cash flows and discounting them back to today’s dollars. In other words, the DCF approach tries to determine what all expected future cash flows are worth in the present, based on a given rate of return and growth expectations.

For Fortune Brands Innovations, the DCF analysis uses a 2 Stage Free Cash Flow to Equity model. The company’s latest twelve months (LTM) Free Cash Flow stands at $335.1 Million. Analysts expect this figure to steadily increase, projecting Free Cash Flow to reach $686.9 Million by 2029. Beyond the five-year horizon covered by analysts, future projections are extrapolated. Over the next decade, annual Free Cash Flow is modeled to continue climbing, supported by industry trends and internal growth estimates.

This model calculates an intrinsic value per share of $87.69. Notably, this is 39.7% higher than Fortune Brands Innovations’ current share price, which implies the stock is significantly undervalued according to this method.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Fortune Brands Innovations.

Our Discounted Cash Flow (DCF) analysis suggests Fortune Brands Innovations is undervalued by 39.7%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Fortune Brands Innovations Price vs Earnings

The price-to-earnings (PE) ratio is a trusted metric for valuing profitable companies like Fortune Brands Innovations. It reflects how much investors are willing to pay for each dollar of earnings the company generates. This makes it a useful gauge for comparing value and expectations across similar businesses.

A “normal” or “fair” PE ratio is shaped by several factors, including a company’s expected growth, industry trends, potential risks, and its profitability. In fast-growing or stable businesses with solid margins and lower perceived risk, investors typically accept a higher PE ratio. In contrast, slow-growth or riskier companies usually command lower PEs.

At present, Fortune Brands Innovations trades at a PE ratio of 16.1x. For context, this is comfortably below the building industry average of 22.4x and also well beneath the peer average of 31.6x. On the surface, this suggests a meaningful discount.

However, rather than relying solely on peer or industry comparisons, the Simply Wall St “Fair Ratio” offers a deeper, more tailored benchmark. This proprietary metric blends growth prospects, profitability, market cap, risk and industry factors to determine what an appropriate PE ratio should look like for this specific business.

According to the Fair Ratio, Fortune Brands Innovations would be fairly valued at 25.7x earnings given its profile and outlook. With its current PE standing at just 16.1x, the stock appears undervalued through this lens and hints at upside potential if the market moves closer in line with these fundamentals.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Fortune Brands Innovations Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a more powerful approach that connects a company’s story to its numbers. A Narrative is simply your perspective or “story” about a company, paired with your own assumptions about how it will perform in the future, including estimates of revenue, profit margins, and fair value. This method helps you link business developments, such as new products, market trends, or risks, to a concrete financial forecast and then see what you believe the shares are actually worth.

Narratives are straightforward and easy for anyone to use, especially on Simply Wall St’s Community page where millions of investors share their stories and forecasts. By comparing your Narrative’s Fair Value to the current Price, you can quickly make more informed buy or sell decisions based on what you believe, not just what the market says. And because Narratives update automatically whenever new information hits, including earnings or major news, you are always working with the latest data and insights.

For example, some investors believe that Fortune Brands Innovations is set for transformation and assign a Fair Value of $83.00, while others focus on risks and assign just $51.00. What is your Narrative?

Do you think there's more to the story for Fortune Brands Innovations? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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