What Happened?

Shares of manufacturing company Leggett & Platt (NYSE:LEG) jumped 8% in the morning session after the company reported third-quarter earnings and provided revenue guidance for the next quarter, which blew past analysts' expectations. On the other hand, its EPS forecast for the next quarter missed. Overall, this was a mixed yet decent quarter.

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What The Market Is Telling Us

Leggett & Platt’s shares are quite volatile and have had 17 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. 

The biggest move we wrote about over the last year was 6 months ago when the stock dropped 32.4% on the news that the company reported first quarter results with its revenue and EPS falling below Wall Street's estimates. The company stated its underperformance stemmed from weak demand in its residential end markets. Additionally, operating cash flows were negative $6 million, down from $103 million in Q1 2023. This was primarily driven by lower accounts payable levels and lower earnings. Moving on, the company reconfirmed its revenue guidance for the full year, but its earnings forecast missed. Overall, this was a bad quarter for Leggett & Platt.

Leggett & Platt is down 50.9% since the beginning of the year, and at $12.98 per share, it is trading 52% below its 52-week high of $27.05 from December 2023. Investors who bought $1,000 worth of Leggett & Platt’s shares 5 years ago would now be looking at an investment worth $251.72.

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