Why Leggett & Platt Stock Fell Today
Shares of Leggett & Platt (NYSE: LEG) fell 6.3% on Tuesday after a noted Wall Street analyst reiterated his negative view on the diversified manufacturing leader.
Why this analyst just lowered his price target on Leggett & Platt
In a note to clients earlier today, Piper Sandler analyst Peter Keith reduced the firm's per-share price target on Leggett & Platt to $16 from $18 and reiterated his underweight rating on the stock.
To justify his relative bearishness, Keith wrote that while Piper Sandler's previous underweight rating "was primarily based on fundamentals with limited risk to the dividend," he now worries that the chance of a dividend cut has increased after taking a deeper dive into Leggett & Platt's balance sheet and cash flows.
What's next for Leggett & Platt investors?
Indeed, the timing of the call is no coincidence; shares plunged last month after Leggett & Platt announced weaker-than-expected quarterly results. This included fourth-quarter revenue that fell 7% year over year to slightly less than $1.12 billion.
Management at the time called it "another challenging year for residential end markets," pointing to weak demand for the company's bedding products and furniture, flooring, and textile products segments.
Leggett & Platt also announced a restructuring of the bedding products segment that will result in $20 million to $25 million of restructuring-related expenses in the first half of this year -- though it should help bolster the company's profitability over the longer term.
In light of that painful report and the prospect that the restructuring may not achieve its desired end goals, however, it's hardly surprising to see some analysts on Wall Street continuing to chime in with pessimistic views on the company.
Should you invest $1,000 in Leggett & Platt right now?
Before you buy stock in Leggett & Platt, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Leggett & Platt wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
*Stock Advisor returns as of March 11, 2024
Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Why Leggett & Platt Stock Fell Today was originally published by The Motley Fool
