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Fortune Brands Home & Security Inc FBHS

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Fortune Brands Sees Another Strong Year for Repair and Remodel Spending in 2021; FVE to $77

Analyst Note

| Brian Bernard, CFA, CPA |

Fortune Brands closed out a strong 2020 campaign that saw the narrow-moat-rated home and security products company increase revenue about 6% year over year, expand adjusted operating margin 80 basis points to 14.1%, and grow adjusted EPS 16% to $4.19. Like the overall United States housing market, residential repair and remodel spending was very strong in 2020 as more time spent at home caused households to reconsider living arrangements and upgrade home amenities. Management expects strong R&R demand to continue in 2021, with 5%-7% market growth. Given this backdrop, the firm expects to increase organic revenue 5.5%-7.5% in 2021 (12.5%-14.5% with the recently acquired Larson business), increase EPS 16%-21% and generate $600 million-$650 million of free cash flow.

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Company Profile

Business Description

Fortune Brands Home & Security is a leading home and security products company that operates three segments. The company's $2.5 billion (fiscal 2020) cabinets segment sells cabinets and vanities under the MasterBrand family of brands. The $2.2 billion plumbing segment, led by the Moen brand, sells faucets, showers, and other plumbing fixtures. The $1.4 billion outdoors and security segment sells entry doors under the Therma-Tru brand name, Fiberon-branded patio decking, and locks and other security devices under the Master Lock and SentrySafe brand names.

520 Lake Cook Road
Deerfield, IL, 60015-5611
T +1 847 484-4400
Sector Consumer Cyclical
Industry Furnishings, Fixtures & Appliances
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 27,500