China’s Fears Contribute in Leggett & Platt Inc (NYSE:LEG)

[Benzinga] Leggett & Platt Inc (NYSE:LEG)(TREND ANALYSIS) stock has fallen more than 10 percent in the past month, and Bugatch believes the primary fear in the market is the risk the company faces from economic weakness in China.

The market sees the company’s outsized exposure to China and has been selling the stock based on assumptions that China weakness will weigh heavily on the company’s bottom line.

For example, Leggett’s automotive business, which has been one of its fastest-growing and most profitable segments, derives up to 50 percent of its revenues from China. However, Bugatch pointed out that only 2–3 percent of the company’s consolidated revenues are consumed in China.

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Leggett & Platt Inc (NYSE:LEG) stock is currently trading 13.85% below its 52-week-high, 35.36% above its 52-week-low. The 1-year stock price history is in the range of $32.64 – $51.28. Leggett & Platt Inc (LEG) has a price to earnings ratio of 28.93 versus Consumer Goods sector average of 14.11. LEG stock price has outperformed the S&P 500 by 11.4%. The Home Furnishings company is currently valued at $6.05 billion and its share price closed the last trading session at $44.18. The stock has a 50-day moving average of $47.19 and a 200-day moving average of $46.9.

Leggett & Platt Inc (LEG) current short interest stands at 6.39 million shares. It has increased by 3% from the same period of last month. Around 5% of the company’s shares, which are float, are short sold. With a 10-days average volume of 1.16 million shares, the number of days required to cover the short positions stand at 5.5 days.

The company is expected to announce next quarter earnings on October 28, at consensus estimate of $0.56. Leggett & Platt Inc (LEG) reported last quarter earnings on July 30. The Home Furnishings company announced earnings per share of $0.53 against a consensus Street estimate of $0.54, missing estimate by $0.01. This corresponds to an increase of $0.06 compared to the same quarter of the previous fiscal year.

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There are currently eight analysts that cover Leggett & Platt Inc stock. Of those eight, one has a Buy rating, seven have a Hold rating. On a consensus basis this yields to a Hold rating. The consensus target price stands at $47.

A recent analyst activity consisted of Raymond James upgrading their Market Perform rating on August 31. On the date of report, the stock closed at $44.42.

From an income perspective, Leggett & Platt Inc (LEG) has a dividend yield of 2.98%. The dividend growth rate has evolved at the pace of 8.1% over the last 5 years and the payout ratio stands at the high level of 72.21%.

Company profile

Leggett & Platt, Incorporated manufactures a wide range of engineered products. The Company’s products include components for bedding, furniture, and other residential furnishings, as well as office and institutional furnishings components, retail store fixtures, and displays, specialty wire products, and automotive seating suspension and lumbar systems.

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