H.B. Fuller reported this morning after yesterday's close, with the market now digesting results against a backdrop where options traders had already priced in exceptional downside risk.
The options signal into the print was the starkest on record in months. The put/call ratio surged to 3.65 on the day before the release — nearly four standard deviations above its 20-day average of 0.36 and the highest reading since the 52-week peak of 6.24. That is an extraordinary shift from the sub-0.10 PCR that dominated through most of August and early September. Yesterday's note flagged a PCR of 1.14 as already elevated; the final pre-print reading nearly tripled that. Options traders were paying heavily for downside protection, and the stock closed at $50.21 — down 1.7% on the day, still nursing a 14.5% loss over the past month.
Short interest has actually been easing into the print, which cuts against the defensive options positioning. Bears pulled back: SI declined nearly 6% over the past week to 5.1% of the free float, down from the 5.25% peak flagged in last week's notes. The borrow market remains entirely unstressed — availability is at 3,218%, comfortably above even the prior year's minimum of 607%, and the cost to borrow has edged up only modestly to 0.53%. Shorts were reducing exposure, not adding, even as put buyers were piling in.
The analyst backdrop — though the consensus is now nearly three months old — had turned more constructive following the June quarter. JP Morgan upgraded to Overweight at $67, Citigroup lifted its target to $75, and Deutsche Bank raised to $72, all in the days after the last print. The mean target sits at $73, implying roughly 45% upside from where FUL closed yesterday. The June quarter itself saw the stock fall 2.1% on the day and 10.1% over the following five days, so the Street's enthusiasm after that print did not translate into price momentum. Valuation remains undemanding: the stock trades at roughly 9.9x trailing earnings and 6.8x EV/EBITDA, near the lower end of the specialty chemicals peer group.
The peers offer some context on Wednesday's tape. IOSP gained 3.9% on the week and NGVT added 5.2%, while AXTA and MTX each shed around 2.6-3.0%. FUL's 1.2% weekly decline sits in the softer half of the group, consistent with a stock carrying company-specific overhang rather than pure sector drag. Today's print will test whether the margin and demand story that drove the 14% September decline is improving — or whether the put buyers who flooded in at a nearly 4-sigma intensity knew something the short-covering crowd did not.
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