×
S&P 500   3,754.47 (-1.85%)
DOW   30,410.05 (-2.21%)
QQQ   281.58 (-0.19%)
AAPL   139.44 (+0.37%)
MSFT   258.40 (-0.45%)
META   163.29 (+2.04%)
GOOGL   2,185.17 (+0.48%)
AMZN   110.90 (+1.22%)
TSLA   668.15 (-2.00%)
NVDA   148.37 (+2.16%)
NIO   21.35 (-0.05%)
BABA   115.74 (-0.22%)
AMD   74.75 (+1.47%)
MU   55.86 (+4.12%)
CGC   2.73 (-2.85%)
T   20.97 (-1.60%)
GE   60.57 (-4.67%)
F   10.87 (-3.98%)
DIS   94.59 (-1.61%)
AMC   13.17 (-2.66%)
PFE   50.89 (-2.71%)
PYPL   72.73 (+1.86%)
NFLX   180.94 (+0.55%)
S&P 500   3,754.47 (-1.85%)
DOW   30,410.05 (-2.21%)
QQQ   281.58 (-0.19%)
AAPL   139.44 (+0.37%)
MSFT   258.40 (-0.45%)
META   163.29 (+2.04%)
GOOGL   2,185.17 (+0.48%)
AMZN   110.90 (+1.22%)
TSLA   668.15 (-2.00%)
NVDA   148.37 (+2.16%)
NIO   21.35 (-0.05%)
BABA   115.74 (-0.22%)
AMD   74.75 (+1.47%)
MU   55.86 (+4.12%)
CGC   2.73 (-2.85%)
T   20.97 (-1.60%)
GE   60.57 (-4.67%)
F   10.87 (-3.98%)
DIS   94.59 (-1.61%)
AMC   13.17 (-2.66%)
PFE   50.89 (-2.71%)
PYPL   72.73 (+1.86%)
NFLX   180.94 (+0.55%)
S&P 500   3,754.47 (-1.85%)
DOW   30,410.05 (-2.21%)
QQQ   281.58 (-0.19%)
AAPL   139.44 (+0.37%)
MSFT   258.40 (-0.45%)
META   163.29 (+2.04%)
GOOGL   2,185.17 (+0.48%)
AMZN   110.90 (+1.22%)
TSLA   668.15 (-2.00%)
NVDA   148.37 (+2.16%)
NIO   21.35 (-0.05%)
BABA   115.74 (-0.22%)
AMD   74.75 (+1.47%)
MU   55.86 (+4.12%)
CGC   2.73 (-2.85%)
T   20.97 (-1.60%)
GE   60.57 (-4.67%)
F   10.87 (-3.98%)
DIS   94.59 (-1.61%)
AMC   13.17 (-2.66%)
PFE   50.89 (-2.71%)
PYPL   72.73 (+1.86%)
NFLX   180.94 (+0.55%)
S&P 500   3,754.47 (-1.85%)
DOW   30,410.05 (-2.21%)
QQQ   281.58 (-0.19%)
AAPL   139.44 (+0.37%)
MSFT   258.40 (-0.45%)
META   163.29 (+2.04%)
GOOGL   2,185.17 (+0.48%)
AMZN   110.90 (+1.22%)
TSLA   668.15 (-2.00%)
NVDA   148.37 (+2.16%)
NIO   21.35 (-0.05%)
BABA   115.74 (-0.22%)
AMD   74.75 (+1.47%)
MU   55.86 (+4.12%)
CGC   2.73 (-2.85%)
T   20.97 (-1.60%)
GE   60.57 (-4.67%)
F   10.87 (-3.98%)
DIS   94.59 (-1.61%)
AMC   13.17 (-2.66%)
PFE   50.89 (-2.71%)
PYPL   72.73 (+1.86%)
NFLX   180.94 (+0.55%)

It’s A Comfortable Time To Buy Steelcase 

Thursday, June 23, 2022 | Thomas Hughes
It’s A Comfortable Time To Buy Steelcase 

Steelcase Moves Higher On Pricing Power 

Steelcase (NYSE: SCS), a maker of office and industrial purpose furniture, has been struggling over the past few years but those times are changing. Postponed demand and a return to in-person operations at many businesses have reinvigorated the company and have it set up to outperform in 2022. The latest results show that not only is the demand coming back, but pricing power is offsetting inflationary pressures and that is great news for the dividend. Steelcase is among the highest-yielding stocks in the furniture industry and it is on track for distribution increases next year if not this year. With shares trading at the lowest levels since the pandemic began, we can’t help but think this is a comfortable time for income investors to get into the name. 

"Inflationary pressures continued to grow this quarter across a number of commodities, and we responded by announcing our fifth price increase over the past 16 months, to be effective in July," said CFO Dave Sylvester. "In addition, we recently announced a surcharge in the Americas in response to rapidly increasing costs of petroleum-based products, freight and delivery, and we have been slowing incremental spending to help offset some of the cost-price timing lag."

Steelcase Outperforms Consensus In Fiscal Q1 

Steelcase had a robust quarter driven by a strong beginning backlog, pricing power, and new orders. The company reported $740.7 million in net revenue for a gain of 33.15 over last year which beat the Marketbeat.com consensus by 720 basis points. The gains were underpinned by a 38% increase in the Americas offset by a smaller 27% gain in the EMEA region. In both cases, new orders are up at least 19% and indicate strength should continue into the coming quarter at least. 


Moving on to the margin, the news is mixed but much better than expected. The GAAP margin contracted by 190 basis points due to the impact of inflation but internal efforts to mitigate those costs trimmed 640 basis points off the operating expenses. This left the GAAP earnings in negative territory at -$0.05 but these results are $0.13 better than consensus and cut the prior year’s loss by 80%. 

Looking forward, the company says its backlog is up 52% from last year and includes a high number of orders slated for delivery in follow-on quarters. This should drive YOY revenue growth in the fiscal 2nd quarter to 21% to 24% and we see some potential for upside surprises. With supply chain and freight issues showing some signs of improvement, there is a real chance that delayed revenue from prior quarters will be recouped faster than expected. 

Steelcase Dividend Is Comfier Than It Looks 

Steelcase pays a high 5.5% yield that looks a little iffy at face value. The payout is not only less than the TTM earnings but the consensus for FY23 is only slightly better at roughly 100% of the payout. The takeaway is the company has a solid balance sheet, positive adjusted EBITDA, and an outlook that includes not only a chance for outperformance this year but an expectation for EPS to double in the following year. In this scenario, we aren’t expecting any dividend increases this year but see no reason why the company won’t keep paying the current distribution. In regard to the balance sheet, the company is net debt but leverage is low, debt is down slightly YOY, and there is still ample cash on the books. 

The Technical Outlook: Steelcase Confirms Bottom 

Shares of Steelcase have been struggling over the past two years but appear to have confirmed the bottom. Price action retreated to the $10.20 just prior to the earnings release and now it is moving higher. Assuming that this move has legs, we see the price action trending higher and up to the top of the range near $16 and possibly by the next reporting season. If not, price action may continue to wallow at the current level until there is more clarity on supply chain issues, inflation, and the economy. 

It’s A Comfortable Time To Buy Steelcase 

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Steelcase (SCS)
1.3448 of 5 stars
$10.53-1.6%5.51%61.94N/AN/A
Compare These Stocks  Add These Stocks to My Watchlist 

Should you invest $1,000 in Steelcase right now?

Before you consider Steelcase, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Steelcase wasn't on the list.

While Steelcase currently has a "N/A" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The 5 Stocks Here

Free Email Newsletter

Complete the form below to receive the latest headlines and analysts' recommendations for your stocks with our free daily email newsletter:


Most Read This Week

Recent Articles

Search Headlines:

Latest PodcastSpot Opportunities Even When Disaster Strikes

Today Kate sits down with repeat guest Andrew Chanin, Co-Founder and CEO of ETF manager ProcureAM. Andrew shares the story behind the launch of the Procure Disaster Recovery Strategy ETF (FEMA).

MarketBeat Resources

Premium Research Tools

MarketBeat All Access subscribers can access stock screeners, the Idea Engine, data export tools, research reports, and other premium tools.

Discover All Access

Market Data and Calendars

Looking for new stock ideas? Want to see which stocks are moving? View our full suite of financial calendars and market data tables, all for free.

View Market Data

Investing Education and Resources

Receive a free world-class investing education from MarketBeat. Learn about financial terms, types of investments, trading strategies and more.

Financial Terms
Details Here
MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau MarketBeat is rated as Great on TrustPilot

© American Consumer News, LLC dba MarketBeat® 2010-2022. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | U.S. Based Support Team at contact@marketbeat.com | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Do Not Sell My Information | RSS Feeds

© 2022 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer.