H.B. Fuller reports its fiscal Q2 results today with short sellers at their least committed in months and the options market no longer signalling the defensiveness it showed two days ago.
The options tone has shifted noticeably since Monday's preview. The put/call ratio has eased back to 0.84 — fractionally below its 20-day average of 0.85 — putting the z-score at a near-neutral -0.36. That is a marked change from the 0.989 reading flagged two days ago, when traders were piling into downside protection. The defensive posture appears to have dissipated rather than intensified into the actual print. Borrow availability remains exceptionally loose at over 1,500%, meaning there are roughly 15 shares available to borrow for every one already shorted, and the cost to borrow has stayed low at around 0.51%. Short interest has declined roughly 21% over the past month to 3.9% of the free float — shorts have been covering, not adding, throughout this run-up.
The core debate heading into the print is whether the margin recovery that drove FUL's 9% gain over the past month is durable. Bulls point to stronger-than-expected results in prior quarters, an improving EV/EBITDA multiple that has compressed to around 8.3x, and a PE of roughly 13x — well below sector peers. UBS raised its price target to $71 last week while keeping a Neutral rating, and JP Morgan upgraded from Underweight to Neutral in late May, both moves suggesting diminishing conviction among the bears rather than outright enthusiasm. Citigroup remains the lone Buy, with a $70 target. The stock at $63.12 trades within reach of the Street's cautious consensus — the key question is whether today's numbers push analysts to close that gap.
The three most recent earnings reactions offer relevant context. FUL rose roughly 5% on the day and 3% over the following week after its April print. The March release produced a 4% one-day gain and a 7% five-day move. The pattern suggests the stock has rewarded positive prints in recent cycles, though peers have been weaker this week — RPM fell 2.6%, AVNT dropped nearly 5%, and PPG shed 3% — adding a modest headwind from broader specialty chemicals sentiment.
Today's report is therefore a test of whether FUL's adhesives volumes and pricing hold up well enough to justify the re-rating of the past month, even as peer group pressure builds.
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