LEG Stock Forecast & Price Target

Leggett & Platt Inc has demonstrated a positive outlook, highlighted by a significant increase in adjusted EBITDA margin, which rose by 210 basis points to 9.9%, driven by effective restructuring savings. Additionally, the company anticipates a slight increase in its EBIT margin for 2025, guiding it up by 10 basis points to a range of 6.5-6.9%, as bedding sales experienced a sequential improvement of 3% in the second quarter. The expansion of gross margin by 170 basis points year-over-year, along with an adjusted EBIT margin increase of 80 basis points, indicates a promising trend attributed to improved metal margins and successful restructuring efforts.

Leggett & Platt has experienced a decline in sales across its key segments, particularly within the Bedding Products segment, which saw a 10% year-over-year decrease in sales and a 13% drop in volumes, attributed to changes in retailer merchandising strategies from major customers. Additionally, the Specialized Products segment reported a 7% reduction in revenues, compounded by a significant 20% year-over-year decline in Steel Rod volumes, further exacerbated by challenging comparisons from the previous year's quarter. These factors suggest ongoing challenges in maintaining sales momentum and profitability, casting a negative outlook on the company's financial performance and future prospects.