Key Takeaways
- David Einhorn’s Greenlight Capital bought a $123 million stake in Fortune Brands Innovations in Q2, while Southeastern Asset Management cut its stake by 21%.
- The stock is down 18% since June 30, and the company’s Q2 report lowered its 2026 earnings outlook once tariff refunds are taken out.
- Analysts expect normalized EPS to fall from $3.61 in 2025 to $3.30 in 2027, and the stock still trades at its five-year average of 15x forward earnings.
- On those numbers, Southeastern’s trim looks like the better call for now, and the Q3 report in early November is the next test.
Two funds took opposite sides of Fortune Brands Innovations (FBIN) in Q2.
David Einhorn’s Greenlight Capital bought in, while Mason Hawkins’ Southeastern Asset Management sold 22% of its shares.
That’s according to each fund’s 13F for the quarter ended June 30, filed Aug. 14. Those are still their latest filings, and the Q3’s are due by Nov. 16.
Both funds still have plenty riding on it
Greenlight’s new stake was 2.24 million shares, worth $123 million at June 30. That made Fortune Brands 3.1% of the $3.91 billion of US stocks Greenlight reported, its seventh-largest position out of 46.
Even after Southeastern’s cut, it still held 1.69 million shares, worth $93 million. At 4.8% of its $1.92 billion in US stocks, Fortune Brands was also its seventh-largest position, out of 47. That’s a bigger share of the fund than Einhorn’s stake is of his.
A 13F only shows what a fund held on the quarter’s last day, so neither filing says when either fund traded, at what price, or why.
Since June 30, Fortune Brands has fallen 18%. That’s the change in the share price alone, since neither filing shows what either fund paid.
TIKR tracks 21 analysts on Fortune Brands Innovations. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Fortune Brands Innovations, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Fortune Brands Innovations’ Analyst Ratings
Earnings are still heading the wrong way
Fortune Brands’ troubles started before the quarter ended. In its Q1 release on May 7, management put weaker results down partly to its own inconsistent execution.
The Q2 report on Aug. 4 didn’t look much better underneath. Sales fell 4% to $1.2 billion, while earnings per share before charges of $1.35 included a $0.52 per share boost from tariff refunds, and the quarter also took a $1.44-per-share impairment charge.
Management raised its full-year EPS guidance to $3.22-$3.52, but only because of those refunds. Without the $0.52 per share boost, the range came down by $0.30 per share at both ends, because the company is spending more to fix execution, especially in its Water business.
Analysts expect normalized EPS to fall again this year and to slip a little more next year, before it recovers in 2028:
That rebound to $3.95 in 2028 rests on 9 analysts, against 21 behind the $3.30 for 2027.
15x is a full price for shrinking earnings
The stock is 31% below its 52-week high, but it isn’t cheap on forward earnings. Fortune Brands trades at 15x, right at its five-year average:
It has been as low as 8x in September 2022 and as high as 20x in October 2024. The shares fell, but expected earnings fell with them, so the multiple is right back at its usual level.
Analysts have lowered their expectations too and the average price target has fallen from $65 a year ago to $51:
That’s still 14% above the last close. The 19 analysts’ targets run from $41 to $70, and the average has climbed back a little from its low of $46 in May.
Southeastern’s trim looks like the better call
The case for buying is a recovery. If the extra spending fixes execution and earnings reach the $3.95 analysts expect for 2028, today’s price could look cheap in hindsight.
But that’s two years out, and only nine analysts have estimates that far ahead. Until then, buyers are paying the stock’s usual multiple for earnings expected to keep falling through 2027.
Frankly, I’d rather wait for proof than pay up for a turnaround, so on TIKR’s numbers I side with Southeastern.
The Q3 report, expected in early November, will show whether the extra spending is working. Then the funds’ Q3 13Fs, due by Nov. 16, will show whether Einhorn added to his stake or Southeastern kept selling.
So what is Fortune Brands Innovations stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
