SCS - Steelcase: Only Modest Upside Remains

2024-06-05 02:42:31 ET

Summary

• Steelcase long-term growth has been mediocre, and remote work now further threatens long-term demand.
• While the company currently faces some pressure from the macroeconomic environment, Steelcase is relatively stable and works with different demand trends than consumer-oriented furnishings companies.
• A recovery should aid demand and margins slightly, but a recovery into the pre-pandemic level seems to need pricing and cost savings initiatives that Steelcase has started.
• Considering the long-term growth trend and weak margins, the stock's current valuation seems balanced, with some upside if margin initiatives are successfully implemented and sales jump slightly.

Steelcase ( SCS ) sells furnishing and architectural products under brands such as the company-named Steelcase, AMQ, Coalesse, HALCON, Orangebox, and others, as a wide portfolio of brands has been built by a history of acquisitions. The company focuses on selling to offices, as the company offers products such as office chairs, adjustable desks, specialty seating, height walls, and architectural pods....

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