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On Friday, Longbow Research initiated coverage on HNI Corp (NYSE:HNI) with a Buy rating and a price target of $70.00, suggesting a positive outlook for the office furniture manufacturer’s stock. According to InvestingPro data, the company currently trades at a P/E ratio of 17x, with analysts maintaining a Strong Buy consensus. The stock appears undervalued based on InvestingPro’s Fair Value analysis, suggesting potential upside for investors. The research firm’s assessment is based on expectations of unit volume growth and improved incremental margins that are anticipated to contribute to earnings before interest and taxes (EBIT) above the consensus for fiscal years 2025 to 2027. The company’s strong financial foundation is evident in its GOOD overall health score from InvestingPro, which also highlights HNI’s impressive 55-year track record of maintaining dividend payments.
Longbow’s analysis indicates that while the contributions from Kimball and operations in Mexico are already reflected in current market estimates, the potential for unit volume growth and margin improvements has not been fully accounted for in the stock’s valuation. These factors are expected to drive financial performance beyond what is currently anticipated by the Street.
The research firm’s forecasts are conservative, excluding potential productivity benefits that HNI Corp has historically realized. Additionally, their estimates do not factor in the possibility of positive pricing and cost mix effects, which could provide further upside to their projections.
Longbow’s price target of $70.00 for HNI Corp’s shares is founded on a multiple of 15 times the forecasted fiscal year 2027 earnings per share (EPS) of $4.70. This target reflects a significant increase from the current trading levels and implies a robust growth trajectory for the company over the next 12 to 18 months. With analysts forecasting EPS of $3.53 for FY2025 and two analysts recently revising earnings upward, InvestingPro subscribers can access additional insights through the comprehensive Pro Research Report, which provides detailed analysis of HNI’s valuation metrics and growth potential.
In other recent news, HNI Corporation reported impressive financial results for the first quarter of 2025, surpassing analyst expectations. The company achieved an earnings per share (EPS) of $0.44, which exceeded the anticipated $0.35. Additionally, HNI’s revenue reached $599.8 million, outperforming the expected $583.47 million. This strong performance was attributed to significant improvements in operating margins and a 20% year-over-year increase in non-GAAP EPS. HNI also declared a quarterly dividend of 34 cents per share, demonstrating its commitment to delivering shareholder value. Looking forward, the company anticipates continued growth, projecting double-digit EPS increases for the year. Despite challenges such as tariff-related cost pressures, HNI remains confident in its strategies to mitigate these impacts. The company’s focus on operational efficiency and product development has positioned it well for future success.
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