2024-05-29 01:04:38 ET
Summary
- Leggett & Platt has slashed its quarterly dividend from $0.46 to $0.05, resulting in a severe stock price decline.
- The company's quarterly results show declining sales, contracting margins, and a challenging macroeconomic environment.
- The new capital allocation strategy introduces uncertainty in the near term, which further justifies why the firm is selling at a discount, based on a set of traditional price multiples.
- LEG stock is downgraded from "hold" to "sell".
Leggett & Platt, Incorporated ( LEG ) designs, manufactures, and sells engineered components and products in the United States and internationally. The firm, which we have praised for its commitment to returning value to its shareholders through dividends for more than half a century, has recently cut its dividend to $0.05 from the previous $0.46, resulting in a severe stock price decline....
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Leggett & Platt: Our Previous Thesis Is Invalidated - A Rating Downgrade Is Imminent