Last Updated: 10 Nov 2024
Executive Summary
Leggett & Platt Incorporated (LEG) is a diversified manufacturer with a market capitalization of $16.29 billion. The company's financial performance has been weak in recent quarters, with negative earnings per share and a low profit margin. However, LEG has a strong balance sheet with low debt and ample liquidity. The stock is currently trading at a discount to its intrinsic value, and analysts are generally neutral on the company.
Company Overview
Leggett & Platt is a diversified manufacturer that designs and produces various engineered components and products. The company's products are used in a wide range of industries, including automotive, furniture, bedding, and construction. LEG has a global presence with operations in over 20 countries.
Fundamental Analysis
Leggett & Platt's financial performance has been weak in recent quarters. The company reported a net loss of $6.00 per share in the latest quarter, compared to a net income of $0.08 per share in the same quarter last year. The company's revenue also declined by 6.3% year-over-year.
The company's weak financial performance is due to a number of factors, including rising input costs, supply chain disruptions, and a slowdown in the housing market. LEG's profit margin has declined significantly in recent quarters, and the company is now operating at a loss.
Despite its weak financial performance, LEG has a strong balance sheet. The company has low debt and ample liquidity. LEG also has a long history of paying dividends, and the company's dividend yield is currently 1.64%.
Technical Analysis
Leggett & Platt's stock price has been in a downtrend since early 2022. The stock is currently trading at $12.13, which is below its 50-day and 200-day moving averages. The stock's relative strength index (RSI) is also below 50, which indicates that the stock is oversold.
Short Term Outlook
The short-term outlook for Leggett & Platt is uncertain. The company's financial performance is weak, and the stock is trading at a discount to its intrinsic value. However, the company's balance sheet is strong, and the stock's RSI is oversold. As a result, the stock could be a potential value play for investors.
Long Term Outlook
The long-term outlook for Leggett & Platt is more positive. The company's products are used in a wide range of industries, and the company has a global presence. LEG also has a strong balance sheet and a long history of paying dividends. As a result, the company is well-positioned to weather the current economic downturn and emerge stronger in the long term.
Analyst Recommendations
Analysts are generally neutral on Leggett & Platt. Three analysts have a hold rating on the stock, while one analyst has a sell rating. The average analyst target price for the stock is $13.33, which is 10.0% above the current price.
