Leggett & Platt (LEG): $659M One-Off Loss Reinforces Profitability Concerns

Leggett & Platt (LEG) reported that earnings are forecast to grow at 3.4% per year, while revenue is projected to expand by 1.7% annually. Both figures lag well behind the broader US market’s expected growth of 15.6% for earnings and 10.1% for revenue. Although the company returned to profitability, its most recent results were impacted by a substantial one-off loss of $659.0 million. With a Price-to-Earnings Ratio of 6.4x, shares trade below both peers and industry averages. However, a five-year trend of a 46% annual decline in earnings and a share price above the estimated fair value provide an important note of caution for investors weighing potential risks and rewards.

See our full analysis for Leggett & Platt.

Next, we’ll see how this latest set of results holds up against the widely followed narratives and expectations on Simply Wall St. Some familiar views may be reinforced, while others could get challenged.

See what the community is saying about Leggett & Platt

Tariff Impact Drives Margin Expansion Narrative

• Recent and proposed tariffs on imported mattresses and components are expected to boost Leggett & Platt’s U.S.-made bedding and steel rod sales, supporting revenue and gross margin gains as price competition from foreign imports eases.
• According to the analysts' consensus view, this theme is central, with several moving parts:
  • Regulatory pressure on non-compliant imports could help protect domestic market share, potentially stabilizing revenue that would otherwise face headwinds from weak consumer demand and industry commoditization risks.
  • Consensus narrative notes that operational restructuring combined with supply chain flexibility may amplify these margin benefits, creating a long-term lift even if headline revenue trends appear lackluster over the next three years.
• With tariff enforcement taking center stage, the latest results put analyst expectations for margin growth under the spotlight. See how the consensus narrative anticipates it playing out. 📊 Read the full Leggett & Platt Consensus Narrative.

Large One-Off Loss Clouds Profit Trend

• The most recent period included a non-recurring one-off loss of $659.0 million, which sharply reduced reported profit despite a return to underlying profitability.
• Consensus narrative takes a cautious view:
  • While restructuring and supply chain moves have strengthened efficiency and margins, the sheer size of this one-time charge underscores the operational volatility and gradual nature of the company’s turnaround.
  • Bears argue that even as profit margins are forecast to climb from 3.4% to 4.6% over the next three years, persistent risks—including soft bedding demand, pricing pressures, and ongoing exposure to supply chain or tariff shocks—may keep profits well below historical potential.

Trading Below Peers, Still Above DCF Fair Value

• Leggett & Platt trades at a 6.4x Price-to-Earnings ratio, meaningfully below the peer average of 15.9x and sector average of 10.7x. Yet its current share price of $10.59 is above the DCF fair value estimate of $9.74.
• Consensus narrative aligns with this tension:
  • Analysts set their price target at $9.67, just 2.4% above where shares currently trade, suggesting limited expected upside over the next year relative to other consumer durables stocks.
  • The balance between value (discount to sector multiples) and risk (recent earnings contraction, below-estimate fair value) is driving a neutral stance, with most seeing the stock as fairly priced given the specific margin pressures and modest near-term growth expectations.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Leggett & Platt on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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A great starting point for your Leggett & Platt research is our analysis highlighting 4 key rewards and 3 important warning signs that could impact your investment decision.

See What Else Is Out There

Leggett & Platt’s ongoing margin pressures, recent sharp earnings declines, and lackluster revenue growth highlight concerns around its value and near-term upside.

If you want companies priced more attractively with stronger upside potential, our these 864 undervalued stocks based on cash flows helps you spot stocks trading well below their fair value right now.

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.

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