La Z Boy Inc. (LZB) recently rebounded from a dip lower to move back within striking distance of the 52-week high at $11.07. Shares have been rallying since mid November when the company reported better than expected Q3 results.
La-Z-Boy Inc. designs, manufactures and sells a wide range of furniture products in the United States and Canada. The company was founded in 1927 and has a market cap of $549 million.
Although sales were down a bit from last year on the weak consumer environment, earnings came in strong at 12 cents, 2 cents ahead of the Zacks Consensus Estimate. La-Z-Boy has been beating big in the last three quarters, with an average earnings surprise of 177%.
The company noted that its results were helped by ongoing cost saving initiatives, adding that it had almost completed the transition of moving its domestic cutting and sewing operations to a new facility in Mexico, where over 840 people will be employed. The move is expected to save La-Z-Boy $20 million a year.
La-Z-Boy’s balance sheet also looks strong, with its debt to capitalization level dropped to 13% from 23% last year.
Estimates have moved higher since word of the good quarter hit the Street, with the current year adding 5 cents to 43 cents. The next-year estimate is up 6 cents in the same time to 83 cents, a bullish 91% growth projection.
After the recent string of gains, this stock is a bit pricey, trading with a forward P/E of 25X, a premium to the overall market.
Shares of LZB recently rebounded from a key trend line that has been supporting prices since June, placing shares back within reach of the 52-week high. If shares are rejected from the high look for more support at the trend line. Take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Surprise Trader.
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