Legget & Platt (LEG) Soars 12.6%: Is Further Upside Left in the Stock?

Legget & Platt (LEG) shares rallied 12.6% in the last trading session to close at $11.25. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 1.9% loss over the past four weeks.

Leggett & Platt's shares surged after it agreed to be acquired by Somnigroup International in an all-stock deal valued at about $2.5 billion, signaling a potential premium and strategic value unlock for shareholders. The rally also reflects optimism around synergies and improved growth prospects under combined operations, boosting investor sentiment.

This engineered component manufacturer is expected to post quarterly earnings of $0.26 per share in its upcoming report, which represents a year-over-year change of +8.3%. Revenues are expected to be $943.27 million, down 7.7% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Legget & Platt, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on LEG going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Legget & Platt belongs to the Zacks Furniture industry. Another stock from the same industry, Flexsteel Industries (FLXS), closed the last trading session 3.7% higher at $50.27. Over the past month, FLXS has returned 6.9%.

For Flexsteel, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.8. This represents a change of -29.2% from what the company reported a year ago. Flexsteel currently has a Zacks Rank of #3 (Hold).

Beyond Nvidia: AI's Second Wave Is Here

The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research