Leggett & Platt (LEG) AI Stock Analysis

• Market Cap: $970.31M
• Dividend Yield: 2.78%
• Average Volume (3M): 3.28M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.95
• Revenue Growth: -7.27%
• EPS Growth: -272.76%
• Country: US
• Employees: 17,700
• Sector: Consumer Cyclical
• Sector Strength: 61
• Industry: Furnishings, Fixtures & Appliances
• EPS (TTM): -3.73
• Shares Outstanding: 134,952,800
• 10 Day Avg. Volume: 2,824,492
• 30 Day Avg. Volume: 3,277,678
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.25
• Price to Cash Flow (P/CF): 2.30
• P/FCF Ratio: 2.10
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $12.00
• Price Target Upside: 66.90% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

Leggett & Platt's overall score is weighed down by financial performance challenges such as declining revenue and profitability, and high leverage. Technical indicators suggest a bearish trend, but the potential for a rebound exists. Despite a negative P/E ratio, the high dividend yield provides some appeal. Mixed earnings call outlook highlights ongoing demand and macroeconomic pressures.

Positive Factors

Cost Management

LEG should benefit from cost savings and better fundamentals in the Bedding segment, with $35M-$40M of cost cuts in place.

Earnings

Analyst upgrades shares of LEG to Neutral and increases the price target to $13 due to increased confidence in EPS growth.

Market Position

The outlook for LEG's Bedding segment is improved as LEG benefits from a large Sealy product line reset and stabilization in market share.

Negative Factors

Automotive Segment Challenges

LEG's Automotive business faces structural headwinds from Chinese manufactured EVs, impacting sales and volumes negatively.

Consumer Demand Uncertainty

Uncertainty around the timing and magnitude of a recovery in consumer discretionary demand and industrial end markets will continue to weigh on the stock.

Retail Sector Disruptions

Retail bankruptcies in the Home Furniture space, like those of Big Lots and Conn’s/Badcock, have been disruptive and could worsen for LEG.

Leggett & Platt Business Overview & Revenue Model

Company Description

Leggett & Platt, Incorporated designs, manufactures, and markets engineered components and products worldwide. It operates through three segments: Bedding Products; Specialized Products; and Furniture, Flooring & Textile Products. The company offers steel rods, drawn wires, foam chemicals and additives, innersprings, specialty foams, private label finished mattresses, mattress foundations, wire forms for mattress foundations, adjustable beds, industrial sewing and quilting machines, and mattress packaging and glue drying equipment, as well as machines to produce innersprings for industrial users of steel rods and wires, manufacturers of finished bedding, big box and e-commerce retailers, bedding brands and mattress retailers, department stores, and home improvement centers. It also provides mechanical and pneumatic lumbar support and massage systems for automotive seating; seat suspension systems, motors and actuators, and cables; titanium, nickel, and stainless-steel tubing, formed tubes, tube assemblies, and flexible joint components for fluid conveyance systems; and engineered hydraulic cylinders to automobile OEMs and Tier 1 suppliers, aerospace OEMs and suppliers, and mobile equipment OEMs. In addition, the company offers steel mechanisms and motion hardware for reclining chairs, sofas, sleeper sofas and lift chairs; springs and seat suspensions; components and private label finished goods for soft seating; and bases, columns, back rests, casters, and frames, as well as control devices for chairs. Further, it offers carpet cushion and hard surface flooring underlayment, structural fabrics, and geo components to manufacturers of upholstered and office furniture, flooring retailers and distributors, contractors, landscapers, road construction companies, retailers, government agencies, and mattress and furniture producers, as well as manufacturers of packaging, filtration, and draperies. The company was founded in 1883 and is based in Carthage, Missouri.

How the Company Makes Money

Leggett & Platt generates revenue through the manufacturing and sale of its diverse product portfolio, primarily within the Bedding Products, Specialized Products, and Furniture, Flooring & Textile Products segments. The Bedding Products segment, which includes mattress springs and specialty foam, is a significant contributor to the company's revenue. The Specialized Products segment offers automotive components like seating support and lumbar systems, serving major car manufacturers. Furniture, Flooring & Textile Products encompass components for residential and office furniture, as well as flooring underlayment and textile products. The company's earnings are driven by both direct sales to manufacturers and secondary markets, leveraging long-standing relationships with key industry players. Additionally, Leggett & Platt benefits from its global operations, which allow it to tap into various geographic markets and economic cycles.

Leggett & Platt Financial Statement Overview

Summary

Leggett & Platt faces challenges with declining revenue and profitability, as indicated by negative net income in recent years. While operational efficiencies improved margins, the high debt level poses a risk. Cash flow remains a bright spot, with strong free cash flow generation providing a buffer against financial instability.

Income Statement

Leggett & Platt shows a concerning trend with declining revenue from $5.14 billion in 2022 to $4.73 billion in 2023, and further to $749.1 million in 2024. Net income has turned negative in 2023 and 2024, which is a major red flag. However, gross profit margins remain stable, indicating cost control. EBIT and EBITDA margins are healthier compared to 2023, suggesting operational improvements.

Balance Sheet

The company exhibits high financial leverage with a debt-to-equity ratio above 2.9 in recent years, signaling potential risk. Stockholders' equity has decreased significantly over the years, affecting the equity ratio. However, the company maintains a reasonable amount of cash and short-term investments, providing some liquidity cushion.

Cash Flow

The cash flow position is relatively strong despite negative net income, with positive operating cash flow and free cash flow over the years. The free cash flow to net income ratio is positive, indicating effective cash conversion even with profitability challenges.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
749.10M	4.73B	5.15B	5.07B	4.28B
	Gross Profit
749.10M	853.80M	976.80M	1.04B	894.50M
	EBIT
240.30M	320.60M	485.00M	596.00M	400.50M
	EBITDA
-287.30M	93.20M	663.80M	778.10M	590.70M
	Net Income Common Stockholders
-511.50M	-136.80M	309.80M	402.40M	253.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
350.20M	365.50M	316.50M	361.70M	348.90M
	Total Assets
3.66B	4.63B	5.19B	5.31B	4.75B
	Total Debt
2.05B	2.20B	2.29B	2.29B	2.06B
	Net Debt
1.70B	1.83B	1.97B	1.93B	1.72B
	Total Liabilities
2.97B	3.30B	3.54B	3.66B	3.36B
	Stockholders Equity
689.40M	1.33B	1.64B	1.65B	1.39B
Cash Flow		Free Cash Flow
224.10M	383.40M	341.10M	164.70M	536.40M
	Operating Cash Flow
305.70M	497.20M	441.40M	271.30M	602.60M
	Investing Cash Flow
-36.60M	-91.30M	-179.40M	-220.70M	-51.40M
	Financing Cash Flow
-270.00M	-358.80M	-284.50M	-39.70M	-448.40M

Leggett & Platt Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.19
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LEG, the sentiment is Negative. The current price of 7.19 is below the 20-day moving average (MA) of 8.05, below the 50-day MA of 9.09, and below the 200-day MA of 11.17, indicating a bearish trend. The MACD of -0.35 indicates Negative momentum. The RSI at 34.62 is Neutral, neither overbought nor oversold. The STOCH value of 14.23 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LEG.

Leggett & Platt Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LZB	73 Outperform	$1.52B	12.62	12.40%	2.25%	1.81%	8.09%
SGI	73 Outperform	$11.83B	26.30	87.10%	0.95%	0.11%	3.48%
LEG	60 Neutral	$970.31M	―	-50.58%	2.78%	-7.27%	-272.76%
Sector *	59 Neutral	$11.22B	10.13	-1.22%	3.96%	1.32%	-18.57%
HNI	52 Neutral	$1.98B	14.68	17.42%	3.13%	3.80%	182.70%
HOFT	47 Neutral	$98.11M	―	-4.47%	10.04%	-16.67%	-24.91%
SNBR	44 Neutral	$125.60M	―	9.10%	―	-10.87%	-33.24%

Leggett & Platt Corporate Events

Leggett & Platt Announces Director Retirements and Salary Adjustments

On February 25, 2025, Leggett & Platt announced the retirement of directors Mark A. Blinn and Manuel A. Fernandez, effective immediately before the 2025 annual shareholder meeting on May 7, 2025. Consequently, the board reduced its number of directors from ten to eight. Additionally, the company set the 2025 base salaries for its executive officers, with some increases for certain executives, and established the 2025 Key Officers Incentive Plan (KOIP) targets and award formulas. These changes reflect the company’s ongoing adjustments to its leadership and compensation structures, potentially impacting its strategic direction and stakeholder relations.

Leggett & Platt Announces Leadership Update and Restructuring

On February 13, 2025, Leggett & Platt announced a leadership update with R. Samuel Smith, Jr. appointed as President of the Specialized Products segment, while Karl G. Glassman continues as Board Chairman and CEO. Leggett & Platt reported a mixed financial performance for 2024, with a 7% decrease in annual sales to $4.4 billion and a 5% decrease in fourth-quarter sales compared to the previous year. The company emphasized its strategic restructuring efforts, which yielded significant benefits, including a $22 million EBIT boost and a $126 million debt reduction. Despite challenges in residential, automotive, and hydraulic markets, the company remains optimistic about its strategic initiatives and is exploring potential asset sales for long-term growth.