Leggett & Platt (NYSE: LEG) experienced a roughly 7% decline in its share price following the release of fourth-quarter results, even though Piper Sandler kept its Neutral rating and maintained a $12.00 price target on the stock.
The bedding and furniture components manufacturer reported an adjusted fourth-quarter earnings per share of $0.22, which was a hair below the $0.23 analysts had forecast. At the same time, the company delivered revenue of $939 million for the quarter, slightly above consensus estimates. Investors reacted to the mixed outcome with a notable sell-off despite the revenue beat.
Market data referenced in the company analysis shows LEG trading at a price-to-earnings ratio of 7.34, a level that some market participants view as suggesting potential undervaluation relative to its InvestingPro Fair Value. The company’s free cash flow yield was highlighted at 18%, and the record of sustained shareholder payouts is significant: Leggett & Platt has paid dividends for 55 consecutive years.
Earnings drivers and margins
Leggett & Platt’s consolidated gross profit margin stood at 18.35% in the period reported, reflecting ongoing pressures in the operating environment for the company’s product lines. Management noted that the broader mattress industry experienced low-single-digit percentage declines in 2025 and that the company expects the industry to see flat to low-single-digit percentage growth in 2026.
Despite that industry outlook, Leggett & Platt warned that its Bedding segment is likely to lag the overall mattress market. Company commentary attributed the expected underperformance to customer consolidation headwinds that began in the fourth quarter and to continuing impacts from customer losses.
Guidance and potential upside
The firm’s guidance for 2026 was described as generally in line with consensus expectations. Management also identified a potential upside scenario tied to an improving macroeconomic backdrop. Separately, the company noted that its U.S. Spring business appears to be seeing a mix shift toward higher-end products, which could be a source of relative strength within Bedding if that trend continues.
On the proposed SGI acquisition, company leadership did not take questions during the earnings call, citing a standing non-disclosure agreement and a six-month standstill period, leaving details around that transaction limited in the public discussion.
Analyst reaction and investor takeaways
Piper Sandler characterized the post-earnings sell-off as "exaggerated" and suggested it was driven by new investor volatility rather than a reappraisal of long-term fundamentals. The $12 price target that Piper Sandler has retained implies roughly 11 times the firm’s 2027 earnings per share estimate, according to the firm’s model.
Investment research notes emphasize LEG’s current price sits below its InvestingPro Fair Value, and with analysts forecasting the company to be profitable this year, some value-oriented investors may view the situation as an opportunity. The stock has posted a 22.2% price return over the past six months, indicating recent positive momentum despite the immediate reaction to the quarter.
Context for investors
While the quarter combined a narrow EPS miss with a modest revenue beat, the mix of results and the specific headwinds cited for the Bedding segment have prompted close attention from investors and analysts. The company’s capital return history and cash flow metrics remain points of interest, but uncertainty around customer consolidation, segment-level performance and the timing and details of the proposed SGI transaction are variables market participants will watch.
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