Many stocks have been testing new highs in 2020, and one of the most notable is Leggett & Platt Incorporated (LEG). Currently, LEG is trading at $38.60 and the avg recommendation for the stock is Moderate Buy. while the current analyst price target stands at $32.40.
To add more color to this target, the company’s high over the last year is $55.42 and the low is $22.03. Over the last 52 weeks, LEG is down -30.35% while the S&P 500 is up 1.21%. The catalyst for this interesting swing was the company’s recent earnings report.
A Notable Earnings Report
In the last quarter, LEG reported a profit of $222.8 million. Leggett & Platt Incorporated also saw revenues increase to $1.05 billion. In addition, LEG has free cash flow of -$13.8 million as of 03-2020 The company’s EBITDA came in at $136.1 million which compares well with its peers.
LEG booked profit margins of 6.90%, its Return on Equity (ROE) is 25.20%, and its Return on Assets is 6.50%. All told, it is clear that, LEG needs to be on your watchlist.
About Leggett & Platt Incorporated
If readers are unfamiliar, Leggett & Platt, Incorporated designs and produces various engineered components and products worldwide. It operates through three segments: Bedding Products; Furniture, Flooring & Textile Products; and Specialized Products. The company offers innersprings, wire forms, specialty foams, and machines to shape wire into various types of innersprings; industrial sewing/finishing machines, conveyor lines, mattress packaging, and glue-drying equipment, as well as quilting machines; and structural fabrics, carpet cushions and hard surface flooring underlayment, and geo components to manufacturers of finished bedding, upholstered furniture, packaging, filtration, and draperies; flooring retailers and distributors of carpet cushions; and contractors, landscapers, road construction companies, and government agencies using geo components. It also provides drawn wires and steel rods to packaging and baling companies, mechanical spring manufacturers, and wire distributors, as well as bedding and furniture components, and automotive seat support and lumbar systems. In addition, the company offers bases, columns, back rests, control devices, and casters and frames; private-label finished furniture; beds and bed frames; adjustable beds; and steel mechanisms and hardware, and springs and seat suspensions to upholstered and office furniture manufacturers; department stores and big box retailers; e-commerce retailers; and mattress and furniture retailers. Further, it provides mechanical and pneumatic lumbar support and massage systems, seat suspension systems, motors and actuators, and cables; titanium, nickel, and stainless steel tubing, formed tube, and tube assemblies; and engineered hydraulic cylinders to automobile and aerospace OEMs, mobile equipment OEMs, and aerospace suppliers. The company sells its products through sales representatives and distributors. Leggett & Platt, Incorporated was founded in 1883 and is based in Carthage, Missouri.
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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. LEG has a short ratio of 3.52 and outstanding shares of 135.40M.
LEG has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 2.62 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 2.35. Leggett & Platt Incorporated LEG also noted assets of $4.98 billion at the end of the last quarter. Investors should also keep an eye on sector updates as LEG has historically followed its peers on positive news.
All told, Leggett & Platt Incorporated LEG has strung together solid data and demonstrated underlying fundamentals. At its current valuation, LEG represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.
Leggett & Platt Incorporated LEG is now commanding a market cap of 5.23B and a float of 130.68M. LEG is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of LEG stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in LEG, either long or short, and we have not been compensated for this article.