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Investing.com - KeyBanc has maintained its Overweight rating and $46.00 price target on La-Z-Boy (NYSE:LZB), despite acknowledging challenging first-quarter trends for the furniture retailer. According to InvestingPro data, the stock currently trades at a P/E ratio of 16.15, with analysts projecting profitability for the current fiscal year.
La-Z-Boy announced a significant independent store acquisition that KeyBanc estimates could potentially add $0.10 annually to earnings per share. The furniture company simultaneously indicated that its fiscal first quarter trends have remained difficult. Despite these challenges, InvestingPro analysis shows the company maintains a strong financial health rating of GOOD, with liquid assets exceeding short-term obligations.
KeyBanc analyst Bradley Thomas lowered first-quarter estimates for La-Z-Boy but expressed optimism about longer-term opportunities for market share gains and margin expansion following recent meetings with senior management.
The investment firm identified several growth catalysts for La-Z-Boy, including product innovation, improved marketing, competitor bankruptcies, and planned updates to its North American supply chain.
KeyBanc highlighted La-Z-Boy’s discounted valuation at 11.2 times fiscal year 2027 earnings estimates compared to its 10-year average of 14 times, along with the company’s strong balance sheet with approximately 20% of its market capitalization in net cash.
In other recent news, La-Z-Boy reported its fourth-quarter earnings for fiscal year 2025, revealing an adjusted earnings per share (EPS) of $0.92, which was below the forecasted $0.98. However, the company’s revenue reached $571 million, surpassing expectations by 2.29%. Despite the revenue surprise, La-Z-Boy’s stock experienced a decline following the earnings release, reflecting investor concerns about the EPS miss. Looking ahead, the company anticipates fiscal Q1 sales between $490 million and $510 million, with an adjusted operating margin of 5.5% to 7%. The company also plans to expand its retail footprint by opening 15 new La-Z-Boy Galleries and 3-4 Joybird stores in fiscal 2026. In another development, La-Z-Boy warned that its fiscal first-quarter results are expected to be at the low end of its previously issued guidance, citing an "increasingly challenging consumer and macro environment." This revision highlights ongoing challenges in the furniture retail sector amid economic uncertainties.
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