Last week, HNI Corp. (HNI) beat earnings forecasts and promptly fell 3.4%. Raymond James, however, thinks the selloff was undeserved and raised its rating on the office-furniture maker, helping HNI Corp. to make back its loss.
Raymond James analysts Budd Bugatch and Bobby Griffin explain why they upgraded HNI Corp.:
We are upgrading HNI to Outperform from a Market Perform rating and establishing a $36.00 price target following the company's 1Q14 earnings release and management conference call. As stated in an earlier note, HNI delivered a "clean" 1Q14 EPS beat; and we are puzzled by Thursday's trading activity. HNI historically trades at a premium to the office furniture peer group, but following the shares' recent pullback (down ~3.5% on Thursday before the Good Friday holiday and down 14% YTD compared to +0.8% for the SPX YTD), this is no longer the case and gives us reason for a more constructive rating.
Shares of HNI Corp. have gained 4.9% to $35.17 at 1:45 p.m., while Steelcase (SCS) has risen 0.8% to $16.93, Knoll (KNL) has advanced 2.5% to $18.74 and Herman Miller (MLHR) has ticked up 0.3% to $30.57.
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