J.P. Morgan Rates H.B. Fuller Neutral

According to J.P. Morgan, H.B. Fuller FUL is delivering good results in a difficult raw material environment. J.P. Morgan said that the company reported a 23% increase in operating income in Q2:F11(ended May 28) despite 20% raw material cost inflation and 5% increase in S&A expense; prices were 8% higher yoy. “We rate Fuller Neutral. FUL trades at 7.2x EBITDA and 12.6x EPS our F2011 forecast versus peers trading at 7.6x and 13.7x, respectively. We expect Fuller to generate 5-6% of its share price in free cash flow in F2011.” H.B. Fuller closed on Friday at $23.43.