Breaking Down Leggett & Platt, Incorporated (LEG) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments in the furnishings and fixtures industry? Have you considered how economic shifts and company-specific strategies could impact your returns? In 2024, experienced persistently weak demand impacted residential businesses, and in the second half of the year, saw demand softening in Automotive and Hydraulic Cylinders businesses. Leggett & Platt's (LEG) full year results revealed a revenue of $4.38 billion, a 7.2% decrease from 2023, and a net loss of $511.5 million. With analysts projecting a potential upside of approximately 44.57% from the current price, is now the time to delve deeper into Leggett & Platt's financial health and strategic maneuvers?

Leggett & Platt, Incorporated (LEG) Revenue Analysis

Understanding where Leggett & Platt, Incorporated (LEG) generates its revenue is crucial for investors. A comprehensive analysis involves examining the various sources, growth rates, and segment contributions that shape the company’s financial health.

Here’s a breakdown of Leggett & Platt, Incorporated (LEG)'s revenue streams:

• Primary Revenue Sources: Leggett & Platt, Incorporated (LEG) operates through three main segments: Bedding Products, Specialized Products, and Furniture, Flooring & Textile Products.
• Year-over-Year Revenue Growth Rate: In 2024, Leggett & Platt, Incorporated (LEG) reported annual revenue of $4.38 billion, a 7% decrease compared to $4.73 billion in 2023. This decline reflects continued weak demand in residential end markets and softening in the Automotive and Hydraulic Cylinders sectors during the latter half of the year.
• Contribution of Business Segments:

  The revenue contribution from each segment in 2024 is as follows:

• Analysis of Significant Changes: The 7% decrease in overall sales for 2024 was influenced by several factors. Persistently weak demand in residential businesses and softening demand in Automotive and Hydraulic Cylinders impacted revenue. Lower volumes, raw material-related selling price decreases, and metal margin compression further contributed to the decline. Despite these challenges, operational efficiency improvements and restructuring benefits partially offset the negative impacts.

For more insights, read the full analysis here: Breaking Down Leggett & Platt, Incorporated (LEG) Financial Health: Key Insights for Investors

Leggett & Platt, Incorporated (LEG) Profitability Metrics

Analyzing Leggett & Platt, Incorporated (LEG)'s profitability involves scrutinizing its gross profit, operating profit, and net profit margins to understand its financial health and operational efficiency. Over time, the trends in these metrics can reveal how well the company manages its costs and generates profit from its sales.

Here's what we'll explore:

• Gross Profit, Operating Profit, and Net Profit Margins: These are key indicators of how efficiently Leggett & Platt, Incorporated (LEG) converts revenue into profit at different stages.
• Trends in Profitability Over Time: Examining these trends helps in understanding the sustainability and growth of the company’s profitability.
• Comparison of Profitability Ratios with Industry Averages: Benchmarking against industry peers provides insights into Leggett & Platt, Incorporated (LEG)'s relative performance.
• Analysis of Operational Efficiency: Evaluating cost management and gross margin trends to assess how well the company controls its expenses and maximizes profit from sales.

Let's dive into each of these areas to provide a clear picture of Leggett & Platt, Incorporated (LEG)'s profitability.

Unfortunately, I don't have enough information to provide specific data on Leggett & Platt, Incorporated (LEG)'s financial performance for the fiscal year 2024. Accessing real-time financial data requires specific tools that I do not currently possess. However, I can offer a general framework for how an investor might analyze these metrics.

Here's how to typically assess profitability metrics:

1. Gross Profit Margin: This is calculated as (Gross Profit / Revenue) 100. It indicates the percentage of revenue remaining after subtracting the cost of goods sold (COGS). A higher gross profit margin suggests that the company is efficient in managing its production costs.
2. Operating Profit Margin: Determined by (Operating Profit / Revenue) 100, this ratio shows the percentage of revenue remaining after deducting operating expenses (e.g., salaries, administrative costs). It reflects the company's efficiency in managing both production and operating costs.
3. Net Profit Margin: Calculated as (Net Profit / Revenue) 100, this is the percentage of revenue that remains as net profit after all expenses, including interest and taxes, are paid. It is a comprehensive measure of overall profitability.

To get a clearer picture, let's consider a hypothetical scenario with sample data:

In this example, you can see a slight recovery in revenue and profitability in 2024 compared to 2023. Analyzing such trends helps to understand the company's performance over time.

Remember to compare these ratios with industry averages to benchmark Leggett & Platt, Incorporated (LEG)'s performance against its peers. This comparative analysis provides valuable insights into whether the company is performing above or below average in terms of profitability.

For further insights, you might find this resource helpful: Breaking Down Leggett & Platt, Incorporated (LEG) Financial Health: Key Insights for Investors

Leggett & Platt, Incorporated (LEG) Debt vs. Equity Structure

Understanding how Leggett & Platt, Incorporated (LEG) manages its debt and equity is crucial for investors. This involves looking at the levels of debt the company holds, comparing its debt-to-equity ratio against industry benchmarks, and noting any recent activity related to its debt, such as new issuances or refinancing.

As of the fiscal year 2024, Leggett & Platt's financial structure includes a mix of both debt and equity. Here's a closer look:

• Overview of Debt Levels:
• Leggett & Platt's long-term debt stands at $1.17 billion.
• Short-term debt and the current portion of long-term debt total approximately $53.8 million.
• Debt-to-Equity Ratio:
• The company's debt-to-equity ratio is around 0.84. This indicates that for every dollar of equity, Leggett & Platt has $0.84 in debt.
• Compared to the industry, this ratio provides insights into how aggressively the company uses debt to finance its operations and growth.
• Recent Debt Activity:
• In 2024, Leggett & Platt issued $500 million in notes due 2029, with an interest rate of 5.950%.
• Additionally, the company redeemed its 3.750% notes due 2025, using cash and commercial paper.

The balance between debt and equity is a key factor in assessing the financial health of Leggett & Platt. Debt financing can provide leverage and potentially increase returns on equity, but it also introduces financial risk. Equity financing, on the other hand, is generally less risky but can dilute ownership and may be more costly than debt.

Here’s a table summarizing key debt-related figures for Leggett & Platt, Incorporated (LEG) in 2024:

Understanding these elements helps stakeholders evaluate the company’s financial risk and stability. For more insights into Leggett & Platt's strategic direction, see Mission Statement, Vision, & Core Values of Leggett & Platt, Incorporated (LEG).

Leggett & Platt, Incorporated (LEG) Liquidity and Solvency

Understanding a company's financial health involves a close look at its liquidity and solvency, which reveal its ability to meet short-term obligations and long-term debts, respectively. For Leggett & Platt, Incorporated (LEG), assessing these factors provides key insights for investors.

Assessing Leggett & Platt, Incorporated (LEG)'s Liquidity:

Liquidity ratios offer a glimpse into Leggett & Platt, Incorporated (LEG)'s capability to cover its immediate liabilities. Here's how to interpret some key metrics:

• Current Ratio: The current ratio, calculated by dividing current assets by current liabilities, indicates whether a company has enough short-term assets to cover its short-term debts.
• Quick Ratio: The quick ratio, which excludes inventories from current assets, provides a more conservative view of liquidity, showing whether a company can meet its obligations without relying on the sale of inventories.

Analyzing working capital trends involves examining the difference between a company's current assets and current liabilities over a period. Monitoring these trends can reveal whether a company's short-term financial health is improving or deteriorating.

Cash flow statements provide a comprehensive view of all cash inflows and outflows that occur at a company. The cash flow statement is broken down into:

• Operating Activities: Cash flow from operating activities reflects the cash generated from the company's core business operations. A positive trend here indicates the company is effectively generating cash from its primary activities.
• Investing Activities: Investing activities include the purchase and sale of long-term assets, such as property, plant, and equipment (PP&E). These activities can provide insight into a company's capital expenditures and strategic investments.
• Financing Activities: Financing activities involve transactions related to debt, equity, and dividends. Monitoring these activities can reveal how a company is managing its capital structure and returning value to shareholders.

Potential liquidity concerns might arise if Leggett & Platt, Incorporated (LEG) shows declining current and quick ratios, negative working capital, or negative cash flow from operating activities. Conversely, strong liquidity positions are indicated by healthy liquidity ratios, positive working capital, and robust operating cash flow.

You might also be interested in: Exploring Leggett & Platt, Incorporated (LEG) Investor Profile: Who’s Buying and Why?

Leggett & Platt, Incorporated (LEG) Valuation Analysis

Determining whether Leggett & Platt, Incorporated (LEG) is overvalued or undervalued requires analyzing several key financial ratios and indicators. Here's a breakdown of essential valuation metrics:

Price-to-earnings (P/E) Ratio:

• The P/E ratio as of April 3, 2025, is 9.46.
• The P/E ratio as of April 2025 (TTM) is 4.38.
• At the end of 2022, the P/E ratio was 14.2.
• However, the current P/E ratio can't be determined, as the TTM EPS is negative.

Price-to-book (P/B) Ratio:

• The P/B ratio as of April 2025 is 1.34.
• The most recent financial reports indicate a price-to-book ratio of 0.210575.
• As of April 11, 2025, the P/B value for Leggett & Platt (LEG) stock is 1.33.

Enterprise Value-to-EBITDA (EV/EBITDA) Ratio:

• The stock's EV/EBITDA ratio is 7.29.
• As of March 21, 2025, the EV/EBITDA ratio is 6.32.

Stock Price Trends:

• The latest closing stock price as of April 16, 2025, is $6.56.
• Over the last 12 months, the stock price has fallen by 60.81%.
• The 52-week high stock price is $18.48, which is 181.7% above the current share price.
• The 52-week low stock price is $6.47, which is 1.4% below the current share price.
• The average stock price for the last 52 weeks is $11.49.

Dividend Yield and Payout Ratios:

• The current dividend yield is 2.91%.
• The annual dividend is $0.20 per share.
• The dividend payout ratio is 19.05%.

Analyst Consensus:

• The consensus rating is 'Hold,' based on 3 hold ratings.
• The average 12-month price target is $9.00, representing a 31.00% increase from the current price.
• Another analysis indicates an average price target of $10.67, with a high forecast of $12.00 and a low forecast of $9.00.

Additional Valuation Metrics:

• Market Cap: $927.13 million.
• Enterprise Value: $2.63 billion.
• Price-to-Sales Ratio: 0.2x.

Here is a table summarizing key valuation ratios for Leggett & Platt:

For further insights into Leggett & Platt's mission, vision, and core values, refer to Mission Statement, Vision, & Core Values of Leggett & Platt, Incorporated (LEG).

Leggett & Platt, Incorporated (LEG) Risk Factors

Understanding the risks facing Leggett & Platt, Incorporated (LEG) is crucial for investors. These risks can stem from both internal and external factors, impacting the company's financial stability and future performance. Here’s an overview of potential challenges:

Industry Competition: The bedding, furniture, and automotive industries are highly competitive. Intense competition can pressure Leggett & Platt's profit margins as competitors vie for market share. This includes pricing pressures and the need for continuous innovation to stay relevant.

Regulatory Changes: Changes in international trade regulations, such as tariffs or trade agreements, can significantly affect Leggett & Platt’s supply chain and costs. Compliance with environmental regulations also adds to operational expenses.

Market Conditions: Economic downturns can reduce consumer spending on durable goods like furniture and bedding, impacting Leggett & Platt’s sales and profitability. Fluctuations in raw material prices, such as steel and foam, can also affect production costs.

Operational Risks: Disruptions in the supply chain, whether due to natural disasters, geopolitical events, or supplier issues, can hinder production and increase costs. Additionally, maintaining operational efficiency across numerous manufacturing facilities presents ongoing challenges.

Financial Risks: High levels of debt can increase financial vulnerability, especially if interest rates rise. The company's ability to refinance debt or access credit markets on favorable terms is also a critical factor.

Strategic Risks: The success of acquisitions and integrations is not guaranteed, and these activities can distract from core operations. Changes in consumer preferences and the need to adapt to new market trends also pose strategic risks.

Leggett & Platt, Incorporated (LEG) discusses various risk factors in its annual reports. For instance, the 2024 annual report highlights risks related to:

• Raw Material Costs: Fluctuations in the prices of steel, foam, and other raw materials can impact profitability.
• Customer Concentration: A significant portion of sales comes from a few large customers, making the company vulnerable if these relationships deteriorate.
• Pension Obligations: Liabilities related to pension plans can create financial strain.

Mitigation strategies often involve:

• Diversification: Expanding into new markets and product categories to reduce reliance on specific sectors.
• Hedging: Using financial instruments to mitigate the impact of raw material price fluctuations.
• Operational Efficiencies: Implementing lean manufacturing principles and supply chain optimization to reduce costs.

Understanding these risks and how Leggett & Platt, Incorporated (LEG) plans to mitigate them is essential for making informed investment decisions. Investors should review the company's filings with the Securities and Exchange Commission (SEC) for a comprehensive understanding of these risk factors.

To gain further insights into investor behavior and market dynamics related to Leggett & Platt, Incorporated (LEG), consider exploring: Exploring Leggett & Platt, Incorporated (LEG) Investor Profile: Who’s Buying and Why?

Leggett & Platt, Incorporated (LEG) Growth Opportunities

Leggett & Platt, Incorporated (LEG) faces a dynamic market environment where strategic initiatives and competitive advantages are crucial for sustaining and enhancing growth. A comprehensive analysis of the company’s key growth drivers, revenue projections, and strategic partnerships provides valuable insights into its future prospects.

Key growth drivers for Leggett & Platt, Incorporated (LEG) include:

• Product Innovation: Continuous innovation in product offerings, focusing on advanced materials and designs, helps Leggett & Platt, Incorporated (LEG) maintain a competitive edge.
• Market Expansion: Expanding into new geographic markets and demographics can significantly increase the company’s revenue base.
• Strategic Acquisitions: Acquiring complementary businesses can broaden Leggett & Platt, Incorporated (LEG)'s product portfolio and market reach.

While pinpointing exact revenue growth projections and earnings estimates requires access to real-time financial forecasting tools, we can analyze historical trends and recent company statements to infer potential future performance. For instance, if Leggett & Platt, Incorporated (LEG) has consistently achieved a 3-5% annual growth rate in specific segments, this could serve as a benchmark for future projections, barring unforeseen market disruptions.

Strategic initiatives and partnerships that may drive future growth include:

• Sustainability Initiatives: Embracing sustainable manufacturing practices and developing eco-friendly products can attract environmentally conscious consumers and create new market opportunities.
• Digital Transformation: Investing in digital technologies to improve operational efficiency, enhance customer experience, and optimize supply chain management.
• Partnerships and Collaborations: Forming strategic alliances with other companies to leverage complementary capabilities and access new markets.

Leggett & Platt, Incorporated (LEG)'s competitive advantages that position the company for growth are:

• Diversified Product Portfolio: A broad range of products across different segments reduces reliance on any single market, providing stability and growth opportunities.
• Strong Customer Relationships: Long-standing relationships with major retailers and manufacturers provide a reliable revenue stream and opportunities for collaboration.
• Operational Efficiency: Continuous improvement in manufacturing processes and supply chain management enhances profitability and competitiveness.

To get a more detailed understanding of Leggett & Platt, Incorporated (LEG)'s investor profile, check out: Exploring Leggett & Platt, Incorporated (LEG) Investor Profile: Who’s Buying and Why?