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Leggett & Platt, Incorporated (NYSE:LEG) Just Reported Earnings, And Analysts Cut Their Target Price

Leggett & Platt, Incorporated (NYSE:LEG) just released its latest quarterly report and things are not looking great. Leggett & Platt missed analyst forecasts, with revenues of US$1.1b and statutory earnings per share (EPS) of US$0.23, falling short by 2.0% and 4.2% respectively. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Leggett & Platt after the latest results.

Check out our latest analysis for Leggett & Platt

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After the latest results, the consensus from Leggett & Platt's five analysts is for revenues of US$4.47b in 2024, which would reflect a perceptible 3.0% decline in revenue compared to the last year of performance. Leggett & Platt is also expected to turn profitable, with statutory earnings of US$1.08 per share. Before this earnings report, the analysts had been forecasting revenues of US$4.50b and earnings per share (EPS) of US$1.12 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

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It might be a surprise to learn that the consensus price target fell 6.9% to US$16.75, with the analysts clearly linking lower forecast earnings to the performance of the stock price. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Leggett & Platt, with the most bullish analyst valuing it at US$20.00 and the most bearish at US$11.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Leggett & Platt shareholders.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 3.9% by the end of 2024. This indicates a significant reduction from annual growth of 2.5% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.1% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Leggett & Platt is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Leggett & Platt's revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Leggett & Platt's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Leggett & Platt. Long-term earnings power is much more important than next year's profits. We have forecasts for Leggett & Platt going out to 2026, and you can see them free on our platform here.

Even so, be aware that Leggett & Platt is showing 2 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.