LEGGETT & PLATT INC (LEG): what the price assumes

Generated: 2026-07-29 · Exported: 2026-08-01 · Source: https://boothcheck.com/report/LEG

Headline

Field	Value
Ticker	LEG
Company	LEGGETT & PLATT INC
Current price	$10.23/sh
Composition	Bedding Group 38% / Automotive Group 20% / Aerospace Products Group 3% / Hydraulic Cylinders Group 5% / Home Furniture Group 6% / Work Furniture Group 7% / Flooring & Textile Products Group 21%

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

Field	Value
Inversion basis	whole-company
Operating margin (value-band context)	3.6%
Operating margin today	7.0%
Margin compression (value-band)	-3.4pp
Multiple paid	12x operating income

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage (computed at the 7% minimum rate; the CAPM rate 5.5% sits below it).

Reconcile: at the x-ray's 9.3% required return this reads ~0.6%/yr; the models below use their own rates.

How unusual the bet is: within-range

Reference	Value
vs own history	-0.60σ
cohort percentile (of 212 peers)	21
implied end-window share	0%

Valuation X-Ray

The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Family	Median price/FV	Models	Reads
Asset	0.50x	4	justifies
Earnings	0.57x	4	justifies
Relative	0.24x	5	justifies
Growth	0.73x	3	justifies

Families that justify the price: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.9%); the inversion above states its own rate.

Per-Model Detail (n=16)

Model	Family	FV	Price/FV	Applicable	Methodology
DCF Perpetual Growth	Growth	$15.82	0.65x	yes	FCF base $0.2B, growth -8% (input: historical growth), terminal g 0.5%, WACC 8.9%, 5yr projection
DCF Exit Multiple	Growth	$13.92	0.73x	yes	Exit EV/EBITDA: 42.7x / 44.7x / 46.7x (bear / base = today's held flat / bull), 5yr
Relative Valuation	Relative	$14.93	0.68x	yes	P/E 14.56x (blended: static sector reference 20x + trailing (TTM) 6x), scenarios: 12.3x / 14.6x / 16.8x (bear / base = reference held flat / bull), EV/EBITDA 22.52x
Simple DDM	Growth	—	—	no	—
Two-Stage DDM	Growth	—	—	no	—
Simple Excess Return	Asset	$17.24	0.59x	yes	BV/sh $7.37, ROE (TTM) 21.6%, ke 9.3%
Two-Stage Excess Return	Asset	$26.19	0.39x	yes	5yr excess ROE then converge to ke=9.3%
Discounted Future Market Cap	Growth	$4.93	2.07x	yes	Rev $4.0B, growth -8% (input: historical growth; tapered), Terminal P/S: 0.3x / 0.4x / 0.4x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair Value	Relative	$56.35	0.18x	yes	EPS $1.61, growth 35% (input: historical EPS growth), PEG=0.18 (Undervalued)
Margin Trajectory	Growth	—	—	no	—
Earnings Power Value	Earnings	—	—	no	—
Residual Income	Asset	$24.72	0.41x	yes	BV $7.37 + 5yr PV of (ROE (TTM) 21.6% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham Number	Asset	$16.34	0.63x	yes	√(22.5 × EPS $1.61 × BVPS $7.37) — Graham's conservative floor
EV/EBITDA Relative	Relative	$4.78	2.14x	yes	EBITDA $0.02B × sector EV/EBITDA 13.0x
FCF Yield	Earnings	$18.43	0.55x	yes	FCF $207.1M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF Yield	Earnings	$16.69	0.61x	yes	SBC-adj FCF $0.18B (FCF $0.21B − SBC $0.02B) capitalized at Kₑ
Ben Graham Formula	Earnings	$51.95	0.20x	yes	EPS $1.61 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/B	Asset	—	—	no	—
P/Sales Sector	Relative	$42.03	0.24x	yes	Revenue $3.95B × sector P/S 1.5x
PEG Fair Value	Relative	$60.37	0.17x	yes	EPS $1.61 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings Yield	Earnings	$17.41	0.59x	yes	EPS $1.61 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations Multiple	Relative	—	—	no	—
Clinical Phase NPV	Growth	—	—	no	—
Merton	Asset	—	—	no	—
V5 Mechanical	—	—	—	no	—

Solvency

Field	Value
Net debt	$1.4b
Net debt / NOPAT (after-tax)	7.84x
Net debt / operating income (pre-tax)	4.92x
Interest coverage	4.0x
Share count CAGR (dilution)	0.7%
Burning cash	no

Bullet Takeaways

• Leggett & Platt has agreed to be acquired by Somnigroup in an all-stock merger, with LEG holders set to receive 0.1455 Somnigroup shares per LEG share, so the stock now trades largely as a claim on that deal rather than on its own future.
• The standalone business is under real pressure: trade sales fell 10% in the most recent quarter and the company says weak demand has "impacted approximately 30% of our sales", with the U.S. bedding market especially soft.
• The decisive event is the merger timeline, expected to close by year-end 2026 subject to a shareholder vote and remaining regulatory clearances, with the antitrust waiting period already expired.

Bull Case

The counterintuitive thing about Leggett & Platt is that the most important fact in the report is not in the financials at all: the company is being bought. Somnigroup, a leading bedding company, agreed to acquire Leggett & Platt in an all-stock deal in which LEG shareholders receive 0.1455 Somnigroup shares each and end up owning roughly 9% of the combined company. That changes the question entirely. A holder is no longer underwriting a standalone diversified manufacturer; they are underwriting the deal closing and the value of Somnigroup stock when it does. The bull case is that the merger gives a struggling, low-multiple business a clearer path to value than it had on its own.

Underneath the deal, the assets the methods value are worth more than the price. Leggett & Platt trades at roughly 10 times operating income, and the asset, earnings-power, and relative-multiple methods all land well above the current price. The company is a components maker across bedding, specialized products, and furniture and flooring, with positions like its trade-rod and automotive components that retain value even through a weak demand cycle. Restructuring has been adding to adjusted profitability, with metal-margin expansion in trade rod and consolidation benefits partially offsetting the volume declines.

The acquirer's logic is the cleanest bull argument. Somnigroup is a bedding-focused company buying a major bedding-components supplier, which is a vertical combination with obvious sourcing and scale synergies. For LEG holders, the all-stock structure means they participate in those synergies rather than simply cashing out at a depressed standalone multiple. With the antitrust waiting period already expired and the deal expected to close by year-end, the bull case is increasingly an arbitrage on a transaction that has cleared its largest regulatory hurdle.

Bear Case

The bear case starts where the bull conveniently stops: the standalone business is in a genuine downturn, and the deal is all-stock, so its value floats with the acquirer's shares. Trade sales fell 10% to $918.2 million and operating profit dropped 29% in the most recent quarter, with the company stating that the "dynamic macroeconomic environment has pressured most of our end markets and negatively affected the demand for our products" and that weakness has "impacted approximately 30% of our sales". Bedding, the largest segment, saw volume fall 12%. If the deal were to break, a holder is left with a business whose earnings are falling and whose end markets remain weak.

The industry cycle is the structural risk under both the company and the merger. Bedding and furniture demand track consumer spending on big-ticket discretionary items, which has been soft as households pull back, and the company describes the U.S. bedding industry as challenged across both manufacturers and retailers. A vertical merger of two bedding-exposed companies does not escape that cycle; it concentrates exposure to it. The synergies the bull counts on have to be earned against a shrinking end market, and the combined company inherits Leggett's weak demand backdrop.

The balance sheet adds the final pressure. Leggett carries net debt of about 4.5 times operating income, heavy for a business with falling profits, and it cut its dividend to $0.05 a quarter while reprioritizing capital allocation, the move of a company conserving cash under strain. The all-stock exchange ratio means the deal value rises and falls with Somnigroup's stock, so even if the merger closes, the payoff is not fixed. The bear case is that a holder is exposed to deal risk, acquirer-stock risk, and a deteriorating end market all at once, with the standalone fundamentals offering little floor if any leg of that fails.

Valuation

The valuation has two layers now, and the deal is the top one. As a standalone business Leggett & Platt trades at roughly 10 times company-wide operating income, low enough that the price sits below what even a 5%-a-year decline in operating profit would justify. That is a bound, not a precise solve, and the company-wide read frames it as a value and asset-supported name. But the pending all-stock merger means the share price is increasingly a function of the 0.1455 Somnigroup exchange ratio and the acquirer's stock, not the standalone math.

On the standalone methods, the spread is entirely on the cheap side. The asset-value, earnings-power, and relative-multiple methods all land well above the current price, which is the market discounting a business in a demand downturn. There is no overvaluation gap; the discount reflects falling profits and a weak bedding market rather than a stretched multiple. In a normal setup that spread would be the value case. Here it is better read as context for the merger: Somnigroup is acquiring a business the static methods say is worth more than its depressed quote, which is part of why an all-stock combination makes sense for the acquirer and gives LEG holders participation in the upside rather than a cash-out at the low.

Solvency is the genuine standalone risk and it bounds the downside if the deal falls through. Net debt sits at about 4.5 times operating income, heavy against falling earnings, with interest covered only about four times. The dividend was cut to $0.05 a quarter, a clear signal of balance-sheet caution. Liquid assets near $511 million provide some cushion, but a leveraged business with declining profits has limited margin for error. The practical read is that the merger, not the standalone balance sheet, is what determines the outcome here: close it and the deal terms govern; break it and the holder is left with a discounted, leveraged, cyclically pressured manufacturer.

Catalysts

The dominant catalyst is the merger. In April 2026, Somnigroup agreed to acquire Leggett & Platt in an all-stock transaction valued around $2.5 billion, with LEG shareholders receiving 0.1455 Somnigroup shares per LEG share and owning roughly 9% of the combined company. The deal is expected to close by year-end 2026, subject to a Leggett & Platt shareholder vote and remaining regulatory clearances; the required U.S. antitrust waiting period expired in early June 2026, clearing the largest hurdle.

The standalone results underline why the deal matters. First-quarter trade sales fell 10% to $918.2 million, operating profit declined 29%, and earnings per share fell to $0.14 from $0.22, with bedding volume down 12% on retailer merchandising changes, specialty-foam softness, and the decision to walk away from a financially challenged spring customer. The company committed to a smaller restructuring plan to consolidate two specialty-foam facilities and cut its quarterly dividend to $0.05 while updating its capital-allocation priorities.

The near-term watch items are entirely transaction-driven: the timing and outcome of the shareholder vote, the remaining competition and foreign-investment clearances in multiple jurisdictions, and the effectiveness of the registration statement for the share issuance. Because the consideration is Somnigroup stock, the value of the deal to a LEG holder also moves with the acquirer's share price between now and close.

Peer Cohorts (Per Segment, With Filing Citations)

Bedding Products (reported)

• LZB (LA-Z-BOY INCORPORATED)
• FY2025 10-K: Upholstered Furniture - Includes revenue for upholstered furniture, such as recliners, sofas, loveseats, chairs, sectionals, modulars, and ottomans. This revenue includes sales to La-Z-Boy Furniture Galleries ® stores (including company-owned stores), operators of La-Z-Boy Comfort Studio ® and branded space locations,…
• FY2025 10-K: …dealers, and a wide cross-section of other independent retailers. Retail Segment . Our Retail segment consists of one operating segment comprised of our 203 company-owned La-Z-Boy Furniture Galleries ® stores. The Retail segment sells primarily upholstered furniture, in addition to some casegoods and other home…
• MHK (MOHAWK INDUSTRIES, INC.)
• FY2025 10-K: …stone slab offerings they provide customers with a comprehensive array of surface options. In carpet, the Company's proprietary fiber technologies include SmartStrand ® and its brand extensions, which are made in part with annually renewable plant-based materials and were the first super-soft stain-resistant products…
• FY2025 10-K: …and new construction channels. The Segment's product lines include broadloom carpet, carpet tile, rugs and mats, carpet pad, laminate, medium-density fiberboard ("MDF"), wood flooring, LVT, hybrid flooring and sheet vinyl. Flooring NA markets and distributes its flooring products under various brands, including the…
• TILE (INTERFACE INC)
• FY2025 10-K: …hard surface flooring, and polished concrete. While the flooring industry has experienced significant consolidation, a large number of manufacturers remain in the industry. A number of domestic and foreign competitors manufacture modular carpet as one segment of their business, and some of these competitors have…
• FY2025 10-K: …The nature of the installation projects is such that the vast majority - an amount in excess of 85 % of these installation projects - are completed in less than five days. On a project-by-project basis, the Company's largest installation customers are retail, education and corporate customers. The Company has…
• SGI (SOMNIGROUP INTERNATIONAL INC.)
• FY2025 10-K: …hospitality and healthcare. General Business and Economic Conditions We believe the bedding industry is structured for sustained growth, driven by product innovation, sleep technology advancements, consumer confidence, housing formations and population growth. In our opinion, the industry is no longer engaged in…
• FY2025 10-K: …significant portion of our Sealy foundation parts from third-party sources. Our Mattress Firm segment sources finished goods from various bedding manufacturers, including our Tempur Sealy North America segment. Additionally, we source our adjustable bed bases and foundations from third-party manufacturers. These are…
• WHR (WHIRLPOOL CORP /DE/)
• FY2025 10-K: , 2025, 2024 and 2023, respectively. Disaggregation of Revenue The following table presents our disaggregated revenues by revenue source. We sell products within all major product categories in each operating segment. For additional information on the disaggregated revenues by operating segment, see Note 15 to the…
• FY2025 10-K: …We have the best brand portfolio in the industry, with multiple brands with more than $1 billion in revenue. The Company is driving purposeful innovation to meet the evolving needs of consumers through its iconic brand portfolio, demonstrating our commitment to being the best kitchen and laundry company, improving…
• SN (SHARKNINJA, INC.)
• FY2025 10-K: …further drives our share of shelf and our category growth. Shark and Ninja serve as the category captains, the market leaders, in a majority of our most important sub-categories. Our goal is to be the most relevant and prominent brand wherever consumers shop. Our always-on media strategy leverages the power of…
• FY2025 10-K: …whether another product could be substituted and whether our competitors were similarly affected. We attempt to anticipate regulatory developments and maintain registrations of, and access to, substitute chemicals and other ingredients, but we may not always be able to avoid or minimize these risks. Certain of our…

Specialized Products (reported)

• ADNT (Adient plc)
• FY2025 10-K: …to be entitled to in exchange for such products based on purchase orders, annual price reductions and ongoing price adjustments (some of which are accounted for as variable consideration and subject to being constrained), net of the impact, if any, of consideration paid to the customer. Approximately 1 % of net sales…
• FY2025 10-K: …Adient expects to be entitled to in exchange for such products based on purchase orders, annual price reductions and ongoing price adjustments. Refer to Note 2, "Revenue Recognition," of the notes to consolidated financial statements for information on Adient's revenue recognition. Customers Essentially all of…
• LEA (LEAR CORP)
• FY2025 10-K: …consolidated financial statements included in this Report. Our customers award business to their suppliers in a number of ways, including the award of complete systems, which allows suppliers either to manufacture components internally or to purchase components from other suppliers at their discretion. Certain of our…
• FY2025 10-K: …to facilitate these functions. Key components of this portfolio include zonal controllers, body domain control modules, and smart and passive power distribution modules. Our software offerings include embedded control, cybersecurity software and software to control hardware devices. Our customers traditionally have…
• GNTX (GENTEX CORPORATION)
• FY2025 10-K: …systems and solutions; turn signal switches; puddle lamps; box lights; and harnesses (see Note 1 1 , "Acquisitions" ). For the majority of automotive products, transfer of control and revenue recognition occurs when the Company ships the product from the manufacturing facility to the customer. The Company generally…
• FY2025 10-K: …or perform goodwill impairment testing. Automotive Products: Automotive products represent the Company's largest business segment, consisting of digital vision, connected car, and other automotive products and electronics which are developed and manufactured by the Company. Products include: interior and exterior…
• VC (VISTEON CORPORATION)
• FY2025 10-K: …are intended to maintain leadership positions in core products and provide the Company with a competitive edge as it seeks additional business with new and existing customers. The Company also works with technology development partners, including customers, to develop technological capabilities and new products and…
• FY2025 10-K: …the Company's core business: Electronics. The Electronics segment provides products and services to customers, including digital instrument clusters, information displays, infotainment, cockpit domain controllers, CognitoAI TM , battery management systems, high voltage power electronics, and engineering services. As…
• DORM (Dorman Products, Inc.)
• FY2025 10-K: , approximately half of our sales of specialty vehicle parts constitute nondiscretionary repair parts. This sector consists of direct-to-consumer and direct-to-dealer channels through both retail and e-commerce platforms. Key purchasing decisions of customers in this sector include ease of ordering, ease of…
• FY2025 10-K: …limited warranties for our heavy-duty and specialty vehicle products. Our standard warranties provide for the repair or replacement of the non-performing part. Product Development We are committed to product development and innovation with a customer-first approach, keeping owners and installers in mind. Our…
• MOD (MODINE MANUFACTURING CO)
• FY2025 10-K: …right to payment for customized products and solutions, the Climate Solutions segment recognizes revenue over time based upon its estimated progress toward satisfaction of the performance obligations. Performance Technologies The Performance Technologies segment provides products and solutions that enhance the…
• FY2025 10-K: ONSOLIDATED FINANCIAL STATEMENTS (In millions, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended March 31, 2023 ​ Climate Performance Segment ​ ​ Solutions ​ Technologies ​ Total Product groups: ​ ​ ​ ​ Data center cooling ​ $ 173.8 ​ $ - ​ $ 173.8 Heat transfer ​ ​ 541.3 ​ ​ - ​ ​ 541.3 HVAC&R ​ 341.0 ​ -…

Furniture, Flooring & Textile Products (reported)

• LZB (LA-Z-BOY INCORPORATED)
• FY2025 10-K: …confidence, employment rates, inflation and interest rates, consumer savings levels, international trade policies, and other factors could affect demand. Upholstered furniture has a shorter life cycle than casegoods furniture because upholstered furniture is typically more fashion and design-oriented and is often…
• FY2025 10-K: Upholstered Furniture - Includes revenue for upholstered furniture, such as recliners, sofas, loveseats, chairs, sectionals, modulars, and ottomans. This revenue includes sales to La-Z-Boy Furniture Galleries ® stores (including company-owned stores), operators of La-Z-Boy Comfort Studio ® and branded space locations,…
• MHK (MOHAWK INDUSTRIES, INC.)
• FY2025 10-K: …("Flooring NA") and Flooring Rest of the World ("Flooring ROW") with their 2025 net sales representing 40%, 34% and 26%, respectively, of the Company's total revenue. Selected financial information for the three segments, geographic net sales and the location of long-lived assets are set forth in Note 17, Segment…
• FY2025 10-K: …and new construction channels. The Segment's product lines include broadloom carpet, carpet tile, rugs and mats, carpet pad, laminate, medium-density fiberboard ("MDF"), wood flooring, LVT, hybrid flooring and sheet vinyl. Flooring NA markets and distributes its flooring products under various brands, including the…
• TILE (INTERFACE INC)
• FY2025 10-K: . The transaction price for these sale and installation contracts is readily determinable between flooring material and installation services and typically is specifically identified in the contract with the customer. The Company does not have any other significant revenue streams outside of these sales of flooring…
• FY2025 10-K: …hard surface flooring, and polished concrete. While the flooring industry has experienced significant consolidation, a large number of manufacturers remain in the industry. A number of domestic and foreign competitors manufacture modular carpet as one segment of their business, and some of these competitors have…
• LCII (LCI INDUSTRIES)
• FY2025 10-K: …consist primarily of steel (coil, sheet, tube, and I-beam), extruded aluminum, glass, wood, fabric, and foam, and are available from a number of sources, both domestic and foreign. Sales and Profits Consolidated net sales for the year ended December 31, 2025 were $4.1 billion, an increase of 10 percent from…
• FY2025 10-K: …these markets. Major customers include Brunswick Corporation (symbol: BC), Polaris Inc. (symbol: PII), Blue Bird Corporation (symbol: BLBD), Skyline Champion Corporation (symbol: SKY), and Cavco Industries, Inc. (symbol: CVCO). We serve our adjacent industries customers by delivering high-quality components such as…
• PATK (PATRICK INDUSTRIES, INC.)
• FY2025 10-K: …sell Forestry Stewardship Council ("FSC") materials to its customers at certain of its manufacturing branches. The FSC certification provides a link between responsible production and consumption of materials from the world's forests and assists the Company's customers in making socially and environmentally…
• FY2025 10-K: 0 square foot facility includes a showroom that displays the Company's marine products as well as the marine design and engineering capabilities and services offered by our marine businesses. Operating Brands Through its operating brands, the Company provides customers with specific product knowledge, expertise and…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

Leggett & Platt 8-K, April 2026 · Leggett & Platt Q1 2026 results, May 2026 · Leggett & Platt 8-K, 2026