Leggett & Platt LEG FAIRLY VALUED Buying Index™ 7 Value Rating

Valuentum Retail Equity Research Ratings as of 3-Feb-2022 Data as of 3-Feb-2022

Buying Index™ 6 Value RatingEconomic Castle

Attractive

Investment ConsiderationsDCF ValuationRelative Valuation

Stock Chart (weekly) ValueCreation™ValueRisk™ValueTrend™Cash Flow GenerationFinancial LeverageGrowthTechnical EvaluationRelative StrengthMoney Flow Index (MFI)Upside/Downside Volume (U/D)Near-term Technical Resistance, 10-wk MADCF = Discounted Cash Flow; MFI, U/D = Please see glossary. MA = Moving Average

Business Quality ValueCreation™

ValueRisk™ Very Poor Poor Good ExcellentCompany Vitals Investment HighlightsMarket Cap (USD) $5,300Avg Weekly Vol (30 wks) 5,96830-week Range (USD) 37.04 - 49.94Valuentum Sector Consumer Discretionary5-week Return -6.9%13-week Return -12.9%30-week Return -17.5%Dividend Yield % 4.3% Firms that generate economic profits with little operating variability score near the top right of the matrix.

Dividends per Share 1.68 Relative Valuation Forward P/E PEG Price / FV

Forward Dividend Payout Ratio 60.7% Disney 36.6 2.3 78.6%Est. Normal Diluted EPS 3.27 Home Depot 23.7 1.9 100.8%P/E on Est. Normal Diluted EPS 11.9 McDonald's 27.5 1.9 120.0%Est. Normal EBITDA 847 Nike 39.5 2.9 106.3%Forward EV/EBITDA 9.0 Peer Median 32.0 2.1 103.5%EV/Est. Normal EBITDA 8.1 Leggett & Platt 14.1 1.4 75.0%Forward Revenue Growth (5-yr) 7.5% Price / FV = Current Stock Price divided by Estimated Fair Value

Forward EPS Growth (5-yr) 15.3% Financial Summary ProjectedNMF = Not Meaningful; Est. = Estimated; FY = Fiscal Year

Fiscal Year End: Dec-19 Dec-20 Dec-21

Returns Summary 3-year Historical Average Revenue 4,753 4,280 5,025Return on Equity 23.8% Revenue, YoY% 11.3% -10.0% 17.4%Return on Assets 7.4% Operating Income 517 405 549ROIC, with goodwill 19.2% Operating Margin % 10.9% 9.5% 10.9%ROIC, without goodwill 32.2% Net Income 334 248 372ROIC = Return on Invested Capital; NMF = Not Meaningful Net Income Margin % 7.0% 5.8% 7.4%Leverage, Coverage, and Liquidity Diluted EPS 2.47 1.82 2.77In Millions of USD Diluted EPS, YoY % 9.0% -26.0% 51.8%Total Debt 1,900 Free Cash Flow (CFO-capex) 525 537 229Net Debt 1,551 Free Cash Flow Margin % 11.0% 12.5% 4.5%Total Debt/EBITDA 3.2 In Millions of USD (except for per share items)

Net Debt/EBITDA 2.6 MID-CAPEBITDA/Interest 7.2 NEUTRALCurrent Ratio 1.6Quick Ratio 0.9

Visit us at www.valuentum.com

BEARISH

Medium

• Leggett & Platt is generally #1 or #2 in most of themarkets it serves, and it competes with few largerivals. Furniture, bedding, and fabric/flooring areamong its largest products. The company is highlyacquisitive and views M&A activity as a core part ofits business model and growth strategy.

• Leggett & Platt acquired Elite Comfort Solutions, aleader in specialized foam technology for bedding andfurniture, for ~$1.25 billion in cash in January 2019.Going forward, Leggett & Platt is targeting annualrevenue growth of 6%-9% over the long haul via acombination of organic growth opportunities andM&A activity.

----- Actual -----

• Leggett & Platt is a Dividend Aristocrat, havinggrown its dividend over the past ~50 consecutiveyears. The company aims to pay out roughly half itsearnings as dividends and is a tremendous generator offree cash flow, though it has a large net debt load.

The week with the highest trading volume out of the last 30 weeks was a week of heavy selling, or distribution (red bar).

NMF = Not Meaningful

IMPROVING

1• Steel is Leggett & Platt's largest input cost. Risingraw material prices and labor expenses along withsupply chain constraints have created sizableheadwinds of late, which the firm seeks to offset viaits pricing power and potential cost structureimprovements.

40.00

Fair Value Range

Leggett & Platt aims to grow its revenues over the long haul by 6%-9% annually via a combination of organic growth opportunities and M&A activity.

Investment Style Industry $52.00

ATTRACTIVE

MID-CAP VALUE Consumer Discretionary Discretionary Spending

UNDERVALUED

Very High

The information and data contained in this report is not represented or warranted to be timely, complete, accurate, or correct. This report is for informational purposes only and should not be considered a solicitation to buy or sell a security. Before acting on any information in this report, you should consider whether the information is suitable for your particular circumstances and, if necessary, seek professional advice. Assumptions, opinions, and estimates are based on our judgment as of the date of the report and are subject to change without notice. Valuentum is not responsible for any errors or omissions or for results obtained from the use of this report. Redistribution is prohibited without written permission. To license Valuentum research, contact us at [email protected].

Structure of the Household Durables IndustryThe household durables industry is heavily tied to the health of consumer disposable income, new home sales, and housing renovation (replacement demand). The group faces stiff international competition, where labor costs may be cheaper, and pressure from discount retailers that continue to improve the quality of their product offerings. The premium mattress segment continues to enjoy a nice demographic tailwind, as it caters to a growing number of aging, more health-conscious customers willing to pay up for a good night’s rest. Still, all constituents deal with volatile input costs. We’re neutral on the group.

EXCELLENTMEDIUM

WEAKNEUTRAL

$41.00 - $63.00 Estimated Fair Value Sector

MODEST

STRONGNEGATIVE

HIGH

High

• Leggett & Platt produces components and productsfound in many homes, offices, retail stores,automobiles, and commercial aircraft. It is organizedinto three segments: Bedding Products, SpecializedProducts, and Furniture, Flooring and TextileProducts. The company was founded in 1883 and isbased in Missouri.

Low

Leggett & Platt LEG UNDERVALUED 5.1%

31.00

36.00

41.00

46.00

51.00

0

50,000,000

100,000,000

150,000,000

200,000,000

Valuentum Retail Equity Research (10=best) Data as of 3-Feb-2022


Attractive

Economic Profit Analysis

ValueCreation™ EXCELLENT Return on Invested Capital (ROIC)

ROIC - WACC Spread, 3-year historical average 23.6%ROIC - WACC Spread, 5-year projected average 21.8%These spreads equal the firm's annual average ROIC (excluding goodwill) less its WACC.

ValueTrend™ NEGATIVE

Weighted Average Cost of Capital (WACC) The graph above shows the firm's ROIC (excluding goodwill) compared with historical averages and its WACC.

ROIC CalculationFiscal Year End: Dec-18 Dec-19 Dec-20

Earnings before InterestOperating Income after Depreciation 443 517 405- Adjusted Taxes (at 20% of EBIT) 89 103 81+ Amortization 32 74 70+ Non-cash Operating Items -2 142 166- Minority Interest 0 0 0Earnings before Interest 384 629 560

Cost of Equity Invested CapitalRisk Free Rate Assumption Inventories 634 637 646Fundamental Beta (ERP multiplier) + Receivables 572 592 564Estimated Equity Risk Premium + Current Deferred Income Taxes 0 0 0Cost of Equity Assumption + Other Current Assets 51 61 53

+ Property, Plant and Equipment, Net 729 831 785After-tax Cost of Debt + Goodwill, Net (Cost in Excess) 834 1,406 1,389Risk Free Rate Assumption + Intangibles 179 764 702Synthetic Credit Spread + Non Current Deferred Income Taxes 0 0 0Cost of Debt Assumption - Accounts Payable 465 463 552Cash Tax Rate Assumption - Other Current Liabilities 263 281 275After-tax Cost of Debt Assumption

Invested Capital, with goodwill 2,269 3,547 3,312Cost of Preferred Stock Invested Capital, without goodwill 1,436 2,141 1,923Preferred DividendsValue of Preferred Stock Return on Invested Capital, with goodwill 18.1% 22.5% 17.0%Cost of Preferred Assumption Return on Invested Capital, without goodwill 29.6% 37.5% 29.4%

In Millions of USD

Weighted Average Cost of Capital (WACC)ERP = Equity Risk Premium

4.3%5.75%

---------- Actual ----------

0.96.5%

Estimated Fair Value Fair Value Range Investment Style Sector Industry

9.8%

$52.00 $41.00 - $63.00 MID-CAP VALUE

Leggett & Platt receives a ValueTrend™ rating of NEGATIVE, which is based on thecompany's trailing three-year performance. The firm's ROIC (excluding goodwill) fellto 29.4% last year from its trailing 3-year average of 32.2%. We expect ROIC(excluding goodwill) to be in the ballpark of about 35% by the end of our discreteforecast period, with downside risk to about 26% over that time period.

The best measure of a firm's ability to create value for shareholders is expressed bycomparing its return on invested capital (ROIC) with its weighted average cost ofcapital (WACC). The gap or difference between ROIC and WACC is called the firm'seconomic profit spread. Leggett & Platt's 3-year historical return on invested capital(without goodwill) is 32.2%, which is above the estimate of its cost of capital of 8.6%.As such, we assign the firm a ValueCreation™ rating of EXCELLENT. In the chart tothe right, we show the probable path of ROIC in the years ahead based on the estimatedvolatility of key drivers behind the measure. The solid grey line reflects the most likelyoutcome, in our opinion, and represents the scenario that results in our fair valueestimate.

Consumer Discretionary Discretionary Spending

8.1%

4.3%

0

10.1%20.0%

0

Note: Valuentum may provide an adjusted ROIC measure to better reflect the economic substance of a company's operations, as in the case of companies with negative invested capital.

NA

8.6%



44.0%

34.8%

29.6%

37.5%

29.4%

25.7%

WACC, 8.6%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

73.6%

26.4%

Equity

Debt

Preferred

Capital Structure



Attractive

Growth Analysis

Revenue Growth MODEST Projected Revenue (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year

Revenue3-year Historical

CAGR5-year Projected

CAGRLeggett & Platt USD 4,280 2.8% 7.5%

Disney USD 67,418 4.3% 11.9%

Home Depot USD 132,110 9.4% 6.0%

McDonald's USD 19,208 -5.6% 11.2%

Nike USD 44,538 7.0% 9.9%

Peer Median 5.6% 10.5%

Industry Median 3.7% 7.8%

In the chart above, we show our baseline forecast for revenue as well as potential upside and downside cases.

EBITDA Growth Projected EBITDA (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year

EBITDA3-year Historical

CAGR5-year Projected

CAGRLeggett & Platt USD 594 1.4% 9.2%

Disney USD 8,770 -21.1% 31.6%

Home Depot USD 20,797 7.5% 12.2%

McDonald's USD 8,957 -2.8% 15.6%

Nike USD 7,681 13.7% 12.8%



In the chart above, we show our baseline forecast for EBITDA as well as potential upside and downside cases.

Net Income Growth Projected Net Income (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year Net Income

3-year Historical CAGR

5-year Projected CAGR

Leggett & Platt USD 248 -5.4% 14.1%

Disney USD 2,024 -45.9% 58.8%

Home Depot USD 12,866 14.2% 14.4%

McDonald's USD 4,731 -3.1% 19.0%

Nike USD 5,727 43.6% 13.3%



In the chart above, we show our baseline forecast for net income as well as potential upside and downside cases.

$41.00 - $63.00 MID-CAP VALUE Consumer Discretionary Discretionary Spending Estimated Fair Value Fair Value Range Investment Style Sector Industry


$52.00


Leggett & Platt's revenue expansion has trailed the median of both its peer group and its industry group during the past three years. We expect the firm's pace of revenue growthto fall below the median of both its peer group and industry group during the next fiveyears. Our growth assessment of each firm is based on the firm's 5-year forwardrevenue CAGR. Leggett & Platt's future pace of revenue growth is MODEST, in ouropinion.

Leggett & Platt's EBITDA expansion has trailed both that of its peer group and itsindustry group during the past three years. We expect the firm's pace of EBITDAgrowth to fall below that of both its peer group and industry group during the next fiveyears. Disney sports the highest expected EBITDA growth rate among peers.

Leggett & Platt's net income expansion has trailed both that of its peer group and itsindustry group during the past three years. We expect the firm's pace of net incomegrowth to fall below that of both its peer group and industry group during the next fiveyears. Disney sports the highest expected net income growth rate among peers.

4,2704,753

4,280

6,752

6,1535,555

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

579

709

594

1,050

924

798

0

200

400

600

800

1,000

1,200

306334

248

567

480

393

0

100

200

300

400

500

600



Attractive

Cash Flow and Financial Leverage AnalysisCash Flow Generation STRONG Financial Leverage HIGH

The bars above show the firms operating cash flow, capital expenditures, and free cash flow, respectively. The bars above show the firm's annual debt-to-EBITDA. The red line shows the firm's normalized measure.

Cash Flow from Operations Projected Operating Cash Flow (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year CFO


5-year Projected CAGR

Leggett & Platt USD 603 10.8% 2.7%

Disney USD 5,566 -27.0% 38.2%

Home Depot USD 18,839 16.1% 9.6%

McDonald's USD 6,265 4.1% 18.1%

Nike USD 6,657 10.3% 12.7%



In the chart above, we show our baseline forecast for CFO as well as potential upside and downside cases.

Free Cash Flow (CFO-capital expenditures) Projected Free Cash Flow (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year FCF


5-year Projected CAGR Source: Company Filings, Valuentum Projections

Leggett & Platt USD 537 23.6% -2.9%

Disney USD 1,988 -41.3% 59.6%

Home Depot USD 16,376 17.3% 9.7%

McDonald's USD 4,624 7.7% 19.2%

Nike USD 5,962 14.9% 11.6%



In the chart above, we show our baseline forecast for free cash flow as well as potential upside and downside cases.

Sector IndustryInvestment Style

Leggett & Platt's cash flow from operations expansion has been greater than that ofboth its peer group and industry group during the past three years. We expect the firm'space of cash flow from operations growth to fall below that of both its peer group andindustry group during the next five years. Disney sports the highest expected cash flowfrom operations growth rate among peers.

Leggett & Platt's free cash flow expansion has been greater than that of both its peergroup and industry group during the past three years. We expect the firm's pace of freecash flow growth to fall below that of both its peer group and industry group during thenext five years. Disney sports the highest expected free cash flow growth rate amongpeers.

Fair Value RangeDiscretionary Spending $41.00 - $63.00

Firms that exhibit high leverage tend to be more risky than firms with relatively lowdebt loads, all else equal. We measure financial leverage by taking a firm's currenttotal debt load and dividing it by the firm's trailing average 3-year annual EBITDA.Firms that are over 3 for this metric, we rate as having high leverage. Companies thathave less than 1.5 turns of leverage (or a measure below 1.5), we rate as having lowleverage. Leggett & Platt's normalized debt-to-EBITDA measure of about 3.03 puts itin the HIGH camp.

Estimated Fair Value $52.00



Firms that generate a free cash flow margin (free cash flow divided by total revenue)above 5% are usually considered cash cows. Leggett & Platt's free cash flow margin hasaveraged about 10.1% during the past 3 years. As such, we think the firm's cash flowgeneration is relatively STRONG. The free cash flow measure shown above is derivedby taking cash flow from operations less capital expenditures and differs fromenterprise free cash flow (FCFF), which we use in deriving our fair value estimate forthe company. For more information on the differences between these two measures,please visit our website at Valuentum.com. At Leggett & Platt, cash flow fromoperations increased about 37% from levels registered two years ago, while capitalexpenditures fell about 59% over the same time period.

MID-CAP VALUE Consumer Discretionary

440

668603

160 14366

281

525 537

Dec-18 Dec-19 Dec-20

Cash from Operations Capital Expenditures Free Cash Flow Leggett & Platt -normalized

leverage, 3.03

0

0.5

1

1.5

2

2.5

3

3.5

12/31/2018 12/31/2019 12/31/2020

Leggett & Platt- annual leverage Leggett & Platt - normalized leverageMedium Threshold HighThreshold

440

668603

854

690

526

0

100

200

300

400

500

600

700

800

900

281

525 537

617

463

308

0

100

200

300

400

500

600

700



Attractive

Valuation Analysis

Valuation Assumptions Valuation BreakdownIn Millions of USD (except for per share items)

Revenue CAGR %Avg. EBIT Margin %Avg. Cash Tax Rate %Earnings Before Interest CAGR %Earnings Per Share CAGR %Free Cash Flow to the Firm CAGR %Earnings before interest = Net operating profits less adjusted taxes

Phase II --> III FCFF CAGR % 3.5% (II) 3% (III)Cost of Equity %After-tax Cost of Debt %Discount Rate (WACC) %Synthetic credit spread = 5.75%

Phase I Present ValuePhase II Present ValuePhase III Present ValueTotal Firm Value

Net Balance Sheet Impact

Total Equity ValueDiluted Shares OutstandingFair Value per Share

DCF Valuation Summary Enterprise Free Cash FlowFiscal Year End: 12/31/2018 12/31/2019 12/31/2020

384 629 560104 118 119160 143 66

45 8 -102 - Acquisitions 109 1,265 0

175 -668 715In Millions of USD

Source: Company Filings, Valuentum Projections

Company NameValuentum Buying

Index™Forward Price-to-

Earnings

Price/Earnings-to-Growth (PEG), 5-

yearEV/Est. Normal

EBITDA

5-year Forward Earnings per Share CAGR

3-year Hist Avg ROIC, without

goodwillDividend Yield

%

Stock Price / Fair Value Estimate

Leggett & Platt 6 14.1 1.4 8.1 15.3% 32.2% 4.3% 75.0%

Disney 3 36.6 2.3 11.6 55.2% 8.5% 0.0% 78.6%

Home Depot 4 23.7 1.9 14.3 16.7% 58.8% 1.8% 100.8%

McDonald's 7 27.5 1.9 15.3 21.4% 28.4% 2.1% 120.0%

Nike 3 39.5 2.9 20.6 14.5% 47.6% 0.8% 106.3%

Peer Median 3.5 32.0 2.1 14.8 19.1% 38.0% 1.3% 103.5%

Industry Median 4.0 20.0 2.1 11.0 15.6% 38.1% 1.3% 91.6%

20.7

Company Metrics versus Peer and Industry Medians

20.7

1.9%

Discretionary Spending

135.9

-5.8%

$52.00

17.5

16.9

18.9

5.1%

3,141

$52.00 $41.00 - $63.00 MID-CAP VALUE Consumer Discretionary

20.0%

9.0

+ Depreciation

29.0

5-year Projections

Forward EV/EBITDA

- Change in Working Capital

Enterprise Free Cash Flow (FCFF)

Our future forecasts for key valuation drivers result in a future free enterprise cashflow stream. Above, we show how we calculate enterprise free cash flow and thehistorical performance of the metric for Leggett & Platt. Over the next five years, weexpect the firm's enterprise free cash flow to expand at about a -6% compound annual growth rate. During years 6 through 20, we expect the measure to grow at a 3.5%rate. Beyond year 20 (in perpetuity), we grow the firm's free cash flow at inflation(3%).

7.5%11.1%

-1,551

Earnings before Interest

7,094

We think Leggett & Platt is worth $52 per share with a fair value range of $41.00 -$63.00. The margin of safety around our fair value estimate is driven by the firm'sMEDIUM ValueRisk™ rating, which is derived from an evaluation of the historicalvolatility of key valuation drivers and a future assessment of them. Our near-termoperating forecasts, including revenue and earnings, do not differ much from consensusestimates or management guidance. Our model reflects a compound annual revenuegrowth rate of 7.5% during the next five years, a pace that is higher than the firm's 3-year historical compound annual growth rate of 2.8%. Our model reflects a 5-yearprojected average operating margin of 11.1%, which is above Leggett & Platt's trailing3-year average. Beyond year 5, we assume free cash flow will grow at an annual rate of3.5% for the next 15 years and 3% in perpetuity. For Leggett & Platt, we use a 8.6%weighted average cost of capital to discount future free cash flows.

In Millions of USD


1,8113,693

View back of report for a full list of industry constituents covered by Valuentum. VBI: Valuentum's ranking for the attractiveness of this investment at the date of the report.

IndustryInvestment Style Sector

- Capital Expenditures

Estimated Fair Value

Results

Fair Value Range


15.3%

---------- Actual ----------

20.7

18.7

26.9

17.1

11.9

P/E on Est. Normal Diluted EPS

13.8

Long-term Projections

9.8%

18.2

8.6%

In the chart below, we show the build up to our estimate of total enterprise value forLeggett & Platt and the break down to the firm's total equity value, which weestimate to be about 7.09USD billion. The present value of the enterprise free cashflows generated during each phase of our model and the net balance sheet impact isdisplayed. We divide total equity value by diluted shares outstanding to arrive at our$52 per share fair value estimate.

8,645

1,811

3,693

3,1411,551

7,094

01,0002,0003,0004,0005,0006,0007,0008,0009,000

10,000

Yr 1-5 Yr 6-20 Perpetuity Net Balance SheetImpact

Equity Value



Attractive

Margin of Safety Analysis

Range of Potential Outcomes ValueRisk™ MEDIUM

Revenue Volatility 7.8%Gross Margin Volatility 9.5%Earnings (EBI) Volatility 21.1%Cash Flow (FCFF) Volatility Greater than 50%Fair Value Range 22.1%The Fair Value Range sets the premium or discount on our estimate of the firm's fair value.

Upside and Downside ProbabilitiesProbability (fair value < $0) Less than 0.1%Probability (fair value > 2x current share price) 0.90%

Future Path of Fair Value

The graph above shows the expected future fair value of the firm's shares relative to its current stock price.

We estimate Leggett & Platt's fair value at this point in time to be about $52 per share.As time passes, however, companies generate cash flow and pay out cash toshareholders in the form of dividends. The chart to the right compares the firm's currentshare price with the path of Leggett & Platt's expected equity value per share over thenext three years, assuming our long-term projections prove accurate. The range betweenthe resulting downside fair value and upside fair value in Year 3 represents our bestestimate of the value of the firm's shares three years hence. This range of potentialoutcomes is also subject to change over time, should our views on the firm's future cashflow potential change. The expected fair value of $61 per share in Year 3 represents ourexisting fair value per share of $52 increased at an annual rate of the firm's cost ofequity less its dividend yield. The upside and downside ranges are derived in the sameway, but from the upper and lower bounds of our fair value estimate range.

IndustryDiscretionary Spending

Leggett & Platt receives a ValueRisk™ rating of MEDIUM based of the historicalvolatility of key drivers of economic value creation. The fair value range sets themargin of safety around our fair value estimate of the firm's shares.

Consumer Discretionary


We strive to answer a few questions that investors often ask: 1) What are the chancesof a total loss of investment in this company? and 2) What is the chance that thecompany is really worth twice what I paid for it? The probability (fair value < 0)strives to answer the first question. It indicates the chance that the firm mayencounter insolvency based on the characteristics of its cash flow stream, capitalstructure, and risk profile. The probability (fair value > 2x current share price) strivesto answer the second question. It is our best estimate of whether investors areparticipating in a half-off sale by buying the company's shares at current prices.

Our discounted cash flow process values each firm on the basis of the present value ofall future free cash flows. Although we estimate the firm's fair value at about $52 pershare, every company has a range of probable fair values that's created by theuncertainty of key valuation drivers (like future revenue or earnings, for example). After all, if the future were known with certainty, we wouldn't see much volatility in themarkets as stocks would trade precisely at their known fair values. Our ValueRisk™rating sets the margin of safety or the fair value range we assign to each stock. In thegraph above, we show this probable range of fair values for Leggett & Platt. We thinkthe firm is attractive below $41 per share (the green line), but quite expensive above$63 per share (the red line). The prices that fall along the yellow line, which includesour fair value estimate, represent a reasonable valuation for the firm, in our opinion.


$41.00 - $63.00Sector Fair Value Range Investment Style

MID-CAP VALUE Estimated Fair Value

$52.00

$41

$52

$63

0 20 40 60 80 100 120

$74

$61

Current Share Price, $39 $48

$0

$10

$20

$30

$40

$50

$60

$70

$80

Current Share Price Yr 1 Fair Value Yr 2 Fair Value Yr 3 Fair Value



Attractive

Technical Analysis

Technical Evaluation BEARISH Money Flow Index (MFI) NEUTRAL

30-week Price and Volume Chart (weekly)Relative Price Strength WEAK

5-week Company Performance -6.9%5-week Market Benchmark Performance 2.5%5-week Relative Performance vs. Market Benchmark -9.4%13-week Company Performance -12.9%13-week Market Benchmark Performance 1.4%13-week Relative Performance vs. Market Benchmark -14.4%30-week Company Performance -17.5%30-week Market Benchmark Performance 13.0%30-week Relative Performance vs. Market Benchmark -30.5%

Upside/Downside Volume IMPROVING Timeliness Matrix™ Equity Valuation

Relative Strength

Firms that are undervalued and currently showing near-term pricing strength score near the top right of the matrix.

Companies that are undervalued and showing near-term relative price strength couldrepresent timely buys, as the stock may be attractive to both value and momentuminvestors. A cross section of the firm's equity valuation and its relative share pricestrength is shown in the matrix above. We tend to prefer undervalued stocks that have strong pricing momentum, also called Valuentum stocks.

In the chart above, we pinpoint the heaviest accumulation or distribution week of thefirm, determined by the week with the highest trading volume during the past 30 weeks.A heavy accumulation (buying) or distribution (selling) week often determines thefuture near-term direction of the firm's share price, as money managers continue tomove in or out of the stock in the days and weeks ahead driving the stock up or down,respectively. For Leggett & Platt, the week with the highest trading volume out of thelast 30 weeks was a week of heavy selling, or distribution (red bar). Such marketactivity could indicate a reversal of an uptrend or further confirmation of a downtrend.

A firm's relative price strength can be assessed over any number of time horizons. Weshow the firm's performance over the past 5 weeks, 13 weeks, and 30 weeks below.In arriving at our relative strength rating for each company, we assess the past 13weeks, which includes the market's reaction to the firm's most recently reportedquarter, where applicable, and other more recent economic events. During the past 13weeks, Leggett & Platt's shares returned -12.9%, while the market benchmarkreturned 1.4%. We think Leggett & Platt's 13-week relative price performance isWEAK.

Discretionary Spending $41.00 - $63.00 MID-CAP VALUE Consumer DiscretionarySector


1

Estimated Fair Value Fair Value Range

Strong

Overvalued

Industry $52.00

UndervaluedFairly Valued

Investment Style

The Money Flow Index (MFI) is an oscillator that uses price and volume to measurebuying and selling pressure. Chartists often look for overbought (above 80) andoversold (below 20) levels to warn of unsustainable near-term price extremes. Leggett& Platt's MFI of 26 (green line) is neutral, suggesting the firm's stock is neitheroverbought nor oversold at this time. However, a score below 50 tends to favor bears.The MFI can also be used to gauge the strength or weakness of a firm's price trend. InLeggett & Platt's case, its stock price and money flow neither reveals a bullish norbearish divergence, further supporting our neutral view on its money flow action.

The firm's near-term moving average (5-week, grey line) and medium-term movingaverage (13-week, red line) are shown in the chart above. Typically, when a shorter-term moving average crosses a medium- or longer-term moving average from below, itrepresents a bullish signal. If the short-term moving average crosses from above, tradersoften view this as bearish. Leggett & Platt's 5-week moving average is below its 13-week measure, indicating a BEARISH trend. This activity further confirms thecompany's 30-week downtrend.

Neutral


Weak

The level and trend of the Upside/Downside (U/D) volume ratio reveals whetherinstitutional participation has been bullish or bearish as of late. Although Leggett &Platt's U/D volume ratio of 0.7 is less than 1, it resides above its trailing average,indicating bearish but IMPROVING institutional interest during the past several weeks.

31

36

41

46

51

0

50,000,000

100,000,000

150,000,000

200,000,000

5-week Moving Average 13-week Moving

Average

Stock Price

363840424446485052

Overbought Line

Oversold Line

42

26

0102030405060708090

0.6

0.7

Average, 0.6

0.00.10.20.30.40.50.60.70.8

- 10-week Moving Average



Attractive

Pro Forma Income Statement -------------------- Historical --------------------

In Millions of USD (except for per share items)Dec-18 Dec-20

Total Revenue 4,270 4,280

Cost of Goods Sold 3,381 3,386

Selling, General and Administrative Expenses 425 424

Other Operating Expenses 20 65

Operating Income 443 405

Unusual items 0 0

Operating Income, including unusual items 443 405

Interest Expense (61) (83)

Other Non-operating Income 2 (1)

Pre-tax Income 384 321

Income Taxes 78 73

Income after tax 306 248

Minority Interest and Equity Income (0) (0)

Net Income, excluding extra items 306 248

Income Available to Common, excluding extra items 306 248

Diluted Earnings per Share, excluding extra items 2.26 1.82

Diluted Weighted Shares Outstanding 135.2 135.9

Source: Company Filings, Xignite, Valuentum Projections

---------- Projected ----------

Note: Pro forma data in discounted cash-flow valuation may reflect significant adjustments from GAAP accounting data, including cash (not effective) tax rates and other analytical adjustments on a backward-looking and forward-looking basis. No individual data, by itself, found in this report should be used to make any investment decision.

(0)

$52.00 $41.00 - $63.00

334

96

0

466

0

549

93

(83)

133.2134.5

2.77

Estimated Fair ValueMID-CAP VALUE

Sector Industry

2.47

135.4


372

3.06

334

Fair Value Range Investment Style

4

4,753

75

490

3,911

517

Dec-21

0

549 593

Consumer Discretionary Discretionary Spending

408

408

517

5,025

(91)

372

5,266

4,083

511

510

Dec-22

334 408

Dec-19

3,702

470

64

102

78

0

0

593

(83)


430

373

(0) (0)



Attractive

Pro Forma Balance Sheet -------------------- Historical --------------------


AssetsTotal Cash (including marketable securities) 268 349Inventory 634 646Accounts Receivable 572 564Other Current Assets 51 53Total Current Assets 1,525 1,612

Gross Fixed Assets 1,981 2,181(Accumulated Depreciation) (1,252) (1,396)Net Property, Plant, and Equipment 729 785

Goodwill, Net 834 1,389Intangibles, Net 179 702Other Long-term Assets 116 266Total Assets 3,382 4,754

LiabilitiesAccounts Payable 465 552Other Current Liabilities 349 403Current Portion of Long-term Debt 1 51Total Current Liabilities 816 1,006

Long-term Debt 1,168 1,849Other Long-term Liabilities 242 509Total Liabilities 2,225 3,364

Preferred Stock 0 0

Shareholders' EquityCommon Stock and Additional Paid in Capital 529 545Retained Earnings 2,614 2,762Other Equity (1,986) (1,917)Total Shareholders' Equity 1,157 1,390

Total Liabilities and Shareholders' Equity 3,382 4,754 4,811


---------- Projected ----------

765 781


(1,682)831

1,323

(1,536)

1,444


3,504 3,488 3,522

0

4,816 4,966

2,067 1,849 1,849509 509 509

463

51

2,301 2,463(1,321)2,152

538 545 5452,735 2,908 3,081

(1,961) (2,130) (2,182)1,312

0 0

Dec-22

664 698

1,9681,7591,538

277 266 266

1,406 1,389 1,389764 632 562

592

645 653

4,966

744

$52.00Investment Style


637

53 53

Consumer Discretionary

774

Sector

248 299 444

61

$41.00 - $63.00Industry

MID-CAP VALUE

4,811

928 1,130 1,164

4,816

51 51434 461

Dec-21Dec-19

Estimated Fair Value Fair Value Range


414



Attractive

Pro Forma Cash Flow Statement -------------------- Historical --------------------


Cash from OperationsNet Income 306 248Depreciation and Amortization 136 189Deferred Income Taxes 0 0Operating Gains Or Losses (2) 166Changes in Working Capital 0 0

Cash Flow from Operations 440 603

Cash from InvestingPurchase of Property, Plant, Equipment (160) (66)Other Investing Cash Flows (118) 17Cash Flow from Investing (278) (49)

Cash from FinancingIssuance (Retirement) of Stock (108) (9)Issuance (Retirement) of Debt (86) (228)Dividends Paid (194) (212)Other Financing Cash Flows (10) (13)Cash Flow from Financing (397) (462)

Foreign Exchange (24) 9

Net Change in Cash (258) 101



(4) 0 0

(53) (52)

(162)

210 216

(7)

(160) 00 (74) (29)


(287)(279)730

(21)

(143) (120) (162)

668

(50) 145

(1) 0 0

0 0(205) (226) (235)946

(1,418) (120)


---------- Projected ----------

(1,275) 0 0

334 373 408192

0 0 0142

349 595

Dec-19 Dec-21 Dec-22

Leggett & Platt LEG UNDERVALUED 5.1% Estimated Fair Value Fair Value Range Investment Style Sector Industry

$52.00 $41.00 - $63.00 MID-CAP VALUE Consumer Discretionary



Attractive

Discretionary SpendingDiscretionary Spending FAIRLY VALUED

Company Name TickerMarket Cap (USD-

mil) DCF Valuation ValueCreation™ ValueRisk™ ValueTrend™ Technicals Relative Strength

Activision ATVI 63,290 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE BULLISH NEUTRAL

AutoZone AZO 47,139 FAIRLY VALUED EXCELLENT LOW POSITIVE BULLISH STRONG

Best Buy BBY 25,982 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE BEARISH WEAK

CarMax KMX 18,002 FAIRLY VALUED VERY POOR MEDIUM POSITIVE BEARISH WEAK

Chipotle CMG 41,350 FAIRLY VALUED EXCELLENT LOW NEGATIVE BEARISH WEAK

Cintas Corp CTAS 42,206 FAIRLY VALUED EXCELLENT LOW POSITIVE BEARISH WEAK

Cracker Barrel CBRL 2,896 FAIRLY VALUED EXCELLENT MEDIUM NEGATIVE BEARISH WEAK

Dick's Sporting DKS 10,460 UNDERVALUED EXCELLENT LOW POSITIVE BEARISH WEAK

Disney DIS 255,493 FAIRLY VALUED GOOD MEDIUM NEGATIVE BEARISH WEAK

Dollar General DG 51,618 FAIRLY VALUED EXCELLENT LOW POSITIVE BEARISH WEAK

Dollar Tree DLTR 31,532 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE BEARISH STRONG

Domino's Pizza DPZ 17,708 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE BEARISH WEAK

Estee Lauder EL 112,853 FAIRLY VALUED EXCELLENT MEDIUM NEGATIVE BEARISH WEAK

Ford F 81,864 FAIRLY VALUED EXCELLENT HIGH POSITIVE VERY BEARISH STRONG

General Motors GM 77,248 FAIRLY VALUED GOOD MEDIUM POSITIVE BEARISH WEAK

Genuine Parts GPC 19,609 FAIRLY VALUED EXCELLENT LOW POSITIVE VERY BULLISH WEAK

Hasbro HAS 13,191 FAIRLY VALUED EXCELLENT LOW POSITIVE BEARISH WEAK

Home Depot HD 399,733 FAIRLY VALUED EXCELLENT LOW POSITIVE BEARISH NEUTRAL

Leggett & Platt LEG 5,300 UNDERVALUED EXCELLENT MEDIUM NEGATIVE BEARISH WEAK

Lowe's LOW 178,620 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE BEARISH NEUTRAL

McDonald's MCD 196,241 FAIRLY VALUED EXCELLENT MEDIUM NEGATIVE VERY BULLISH STRONG

Netflix NFLX 188,823 FAIRLY VALUED VERY POOR HIGH POSITIVE BEARISH WEAK

Nike NKE 237,805 FAIRLY VALUED EXCELLENT LOW POSITIVE BEARISH WEAK

Ralph Lauren RL 8,752 FAIRLY VALUED EXCELLENT HIGH NEGATIVE VERY BULLISH WEAK

Ross Stores ROST 33,870 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE NEUTRAL WEAK

Starbucks SBUX 114,294 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE NEUTRAL WEAK

Tesla TSLA 1,006,589 FAIRLY VALUED EXCELLENT HIGH POSITIVE BEARISH WEAK

TJX Cos TJX 86,050 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE BEARISH NEUTRAL

Ulta Salon ULTA 20,907 FAIRLY VALUED EXCELLENT LOW POSITIVE BEARISH WEAK

VF Corp VFC 25,590 UNDERVALUED EXCELLENT LOW NEGATIVE BEARISH WEAK

Whirlpool WHR 13,127 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE BEARISH WEAK

Williams-Sonoma WSM 12,773 FAIRLY VALUED EXCELLENT LOW POSITIVE BEARISH WEAK

Yum! Brands YUM 38,782 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE BEARISH NEUTRAL

Williams-Sonoma WSM 9,028 FAIRLY VALUED EXCELLENT LOW NEGATIVE BULLISH STRONG

NEUTRAL

UNATTRACTIVE

UNATTRACTIVE

ATTRACTIVE

ATTRACTIVE

MID-CAP VALUE

NEUTRAL

ATTRACTIVE

NEUTRAL

ATTRACTIVE

NEUTRAL

NEUTRAL

LARGE-CAP GROWTH

LARGE-CAP BLEND

LARGE-CAP BLEND

LARGE-CAP CORE

MID-CAP VALUE

LARGE-CAP VALUE

MEGA-CAP BLEND

LARGE-CAP VALUE

MEGA-CAP GROWTH

MID-CAP BLEND

LARGE-CAP BLEND

LARGE-CAP BLEND

MEGA-CAP GROWTH

LARGE-CAP BLEND

NEUTRAL

ATTRACTIVE

UNATTRACTIVE

We think the Discretionary Spending industry is fairly valued at this time. Theindustry's market cap is trading between 80% and 120% of our estimate of its fair valuebased on our DCF process. Although we use a firm-specific ValueRisk™ measure todetermine whether a firm is undervalued or overvalued based on our DCF process, weconsider an industry to be undervalued if it is trading below 80% of our estimate of itsfair value and overvalued if it is trading at over 120% of our estimate of its fair value.We think these fair value ranges are appropriate given the diversification benefits ofholding a basket of stocks. Although there may be individual opportunities within theDiscretionary Spending industry, we don't find the industry as a whole attractive basedsolely on valuation.

Shaded blue denotes that the firm has earned the highest rating for that respective category.Investment Style

LARGE-CAP BLEND

LARGE-CAP CORE

LARGE-CAP VALUE

LARGE-CAP BLEND

LARGE-CAP BLEND

ATTRACTIVE

LARGE-CAP VALUE


LARGE-CAP GROWTH

LARGE-CAP CORE

LARGE-CAP VALUE

LARGE-CAP CORE

LARGE-CAP CORE

LARGE-CAP GROWTH

ATTRACTIVE

NEUTRAL

NEUTRAL

ATTRACTIVE

ATTRACTIVE

LARGE-CAP CORE

LARGE-CAP VALUE

LARGE-CAP CORE

LARGE-CAP VALUE

MEGA-CAP CORE

MID-CAP VALUE

LARGE-CAP VALUE

The above bar chart reveals the price/fair value of the company, its peers, and the industry as a whole.

NEUTRAL

ATTRACTIVE

ATTRACTIVE

ATTRACTIVE

NEUTRAL

$52.00 $41.00 - $63.00 MID-CAP VALUE Consumer Discretionary Discretionary Spending

Relative Valuation

ATTRACTIVE

NEUTRAL

NEUTRAL

ATTRACTIVE

NEUTRAL

UNATTRACTIVE

NEUTRAL

NEUTRAL

UNATTRACTIVE

Estimated Fair Value Fair Value Range Investment Style Sector Industry


75.0%

103.5%

91.6%

0%

20%

40%

60%

80%

100%

120%

Leggett & Platt Peer Median Discretionary Spending

Valuentum's Full Page Stock Report


BA

G

I

N

C

J

D

M

H

E

L

K

A DCF ValuationShows whether the firm is undervalued, fairly valued, or overvalued based on our DCF process and by how much.

B Valuentum Buying Index (VBI)Provides insight into the timeliness of an investment opportunity. We rank firms from 1 to 10 based on rigorous fiancial, valuation, and technical analysis. A 10 represents one of our top picks.

C Valuentum Value Rating (VVR) Indicates whether we think a firm is undervalued, fairly valued, or overvalued on the basis of our DCF process.

D Investment ConsiderationsEvaluates firms on 12 different measures, from the firm's growth and cash flow generation to the stock's money flow index and upside/downside volume. We reveal technical support and resistance levels.

E 30-week Price and Volume ActionDisplays the last accumulation or distribution week of the stock and historical price and volume action.

G Company VitalsShows sector,industry and other relevant company information.

H Business QualitySummary of the firm's ability to create value for shareholders compared wth the underlying risk of its operations.

I Normalized EPS and EBITDAEstimation of the firm's normalized earnings measures and the corresponding valuation mutliples.

J Investment HighlightsOur opinion of the company, including analysis of its financial and technical strengths and weaknesses.

K Relative ValuationComparison of the firm's PE, PEG, and Price/FV ratios versus peers.

L Returns Summary3-year averages of the firm's key return measures, including return on invested capital, with and without goodwill.

M Leverage, Coverage, and LiquidityA snapshot of the company's financial health.

N Financial SummaryA summary of the proforma financial statements found in the extended report.

VBI Score Action10 Top Pick9 We'd Consider Buying

6 to 8 Constructive (add/trim)3 to 6 Less Exciting (add/trim)1 to 2 We'd Consider Selling

UNDERVALUED

FAIRLY VALUED

OVERVALUED

• Revenue Volatility • Margin Volatility • Earnings Volatility • Cash Flow Volatility

A complete three-stage free cash flow to the firm valuation model generates an estimate of the firm's equity value per share based on estimated future free cash flows.

About Valuentum

The firm's stock price is compared to the suggested margin of safety. If a firm's stock price falls below the lower bound of our estimated fair value range, it receives Valuentum's highest Value Rating.The volatility of key valuation drivers are estimated and a margin of safety is determined.

@Valuentum, we strive to stand out from the crowd. Mostinvestment research publishers fall into a few camps,whether it be value, growth, income, momentum, chartistor some variant of the aforementioned. We think each inits own right holds merit, but we think the combination ofthese approaches can be even more powerful. After all,stock price movements aren’t just driven by investors ofthe value or growth variety, but by all market participants.Therefore, we look at stocks from a variety of investmentperspectives in order to better understand and identifyideas. We want to provide relevant information.

The core of our process is grounded in rigorous discountedcash flow analysis and incorporates the concept of amargin of safety. We offer a fair value estimate for eachcompany and provide a relative valuation assessment inthe context of a company’s industry and closest peers. Across section of our ValueCreation™ and ValueRisk™ratings provides a financial assessment of a company’sbusiness quality, while our ValueTrend™ rating offersinsight into the trajectory of a firm’s economic profitcreation. The Economic Castle rating measures themagnitude of future economic value generation, and theDividend Cushion ratio assesses the financial capacity of acompany to keep raising its dividend.

Our analysis doesn’t stop there. We also offer a technicalevaluation of the stock as well as other momentumindicators. We not only want to reveal to readers whichfirms may be undervalued, in our view, but we also wantto provide readers with information to help them assessentry and exit points. Most research publishers focus onarriving at a target price or fair value estimate, but mayfall short of providing a technical assessment to bolsterbuy and sell disciplines. We strive to go the distance andprovide readers with answers--not half the story.

An explanation of our approach would not be complete ifwe didn’t describe our ideal stock idea. We’re lookingfor companies that are undervalued--both on a DCF basisand versus peers--have strong growth potential, have asolid track record of creating economic profits forshareholders with reasonable risk, are strong cash flowgenerators, have manageable financial leverage, and arecurrently showing bullish technical and momentumindicators. For dividend growth ideas, we look forcompanies that have both the capacity and willingness tokeep raising the dividend.

Can such stock ideas exist? Subscribe to Valuentum toreceive our best investment ideas and analysis onhundreds of stocks, dividends, ETFs and more.

Full annual forecasts of income statement, balance sheet, and cash flow statement items. Firm-specific cost of equity, cost of debt, weighted average cost of capital, and long-term growth and profitability measures estimated.

Historical firm-specific financial data generates our ValueCreation™, ValueRisk™, and ValueTrend™ ratings. The data provides the basis for our financial forecasts.


Financial Forecasts

Financial Statement Analysis

Discounted Cash Flow Valuation

ModelValueRisk™

Rating

Valuentum Value Rating (VVR)

VBI Score Action10 Top Pick9 We'd Consider Buying

6 to 8 Constructive (add/trim)3 to 6 Less Exciting (add/trim)1 to 2 We'd Consider Selling

The information contained in this report is not represented or warranted to be accurate, correct, complete, or timely. This report is for informational purposes only and should not be considered a solicitation to buy or sell a security. Before acting on any information in this material, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Assumptions, opinions, and estimates are based on our judgment as of the date of the report and are subject to change without notice. Valuentum is not responsible for any errors or omissions or for results obtained from the use of this report. Redistribution is prohibited without written permission. To license Valuentum research, contact us at [email protected].

@ Valuentum, we like to look at companies from anumber of different perspectives. The Valuentum BuyingIndex (VBI) combines rigorous financial and valuationanalysis with an evaluation of a stock's technicals to derivea rating between 1 and 10 for each company. The VBIplaces considerable emphasis on a company's discountedcash-flow (DCF) valuation, its relative valuation versuspeers (both forward PE and PEG ratios), and its technicalsin order to help readers assess entry and exit points on themost interesting ideas.

Let's follow the red line on the flow chart below to seehow a company can score a 10, the best mark on the index(a "Top Pick"). First, the company would need to be'undervalued' on a DCF basis and 'attractive' on a relativevalue basis. The stock would also have to be exhibiting

Methodology for Picking Stocks - Valuentum Buying Index™ (VBI)

'bullish' technicals. The firm would need aValueCreation™ rating of 'good' or 'excellent', exhibit'high' or 'aggressive' growth prospects, and generate atleast a 'medium' or 'neutral' assessment for cash flowgeneration, financial leverage, and relative price strength.

This is a tall order for any company. Stocks that don'tmake the cut for a 10 are ranked accordingly, with theleast attractive stocks, in our opinion, garnering a ratingof 1 ("We'd sell"). Most of our coverage universeregisters ratings between 3 and 7, but at any given timethere could be large number of companies garneringeither very high or very low scores, especially at marketlows or tops, respectively.

The Best Ideas Newsletter portfolio puts the VBI intopractice.

DCF FairlyValued

DCF Undervalued

Relative ValueUnattractive/Neutral

Relative Value Attractive

Relative ValueUnattractive/Neutral


Technicals Bearish: 1

Technicals Neutral: 2

TechnicalsBullish: 4

Technicals Bullish: 7

TechnicalsBearish: 6

Technicals >= BullishValueCreation(TM) >= GoodGrowth >= HighCash Flow Generation >= MediumFinancial Leverage <= MediumRelative Strength >= Neutral

Final Score: 10



TechnicalsBearish: 3

Relative Value Unattractive/Neutral











Initial Index Score

DCF Overvalued

Glossary

Technical Evaluation. We evaluate a firm's near-term and medium-term movingaverages and money flow index (MFI) to assign each firm a rating along thefollowing scale: VERY BULLISH, BULLISH, NEUTRAL, BEARISH, and VERYBEARISH.

DCF Valuation. We opine on the firm's valuation based on our DCF process. Firmsthat are trading with an appropriate discount to our fair value estimate receive anUNDERVALUED rating. Firms that are trading within our fair value range receive aFAIRLY VALUED rating, while firms that are trading above the upper bound of ourfair value range receive an OVERVALUED rating.

Investment Style. Valuentum uses its own proprietary stock-classification system.Nano-cap: Less than $50 million; Micro-cap: Between $50 million and $200 million;Small-cap: Between $200 million and $2 billion; Mid-cap: Between $2 billion and$10 billion; Large-cap: Between $10 billion and $200 billion; Mega-cap: Over $200billion. Blend: Firm's that we think are undervalued and exhibit high growthprospects (growth in excess of three times the rate of assumed inflation). Value:Firm's that we believe are undervalued, but do not exhibit high growth prospects.Growth: Firms that are not undervalued, in our opinion, but exhibit high growthprospects. Core: Firms that are neither undervalued nor exhibit high growthprospects.

Company Vitals. In this section, we list key financial information and the sector andindustry that Valuentum assigns to the stock. The P/E-Growth (5-yr), or PEG ratio,divides the current share price by last year's earnings (EPS) and then divides thatquotient by our estimate of the firm's 5-year EPS growth rate. The estimatednormalized diluted EPS and estimated normalized EBITDA represent the five-yearforward average of these measures used in our discounted cash flow model. The P/Eon estimated normalized EPS divides the current share price by estimated normalizeddiluted EPS. The EV/estimated normalized EBITDA considers the current enterprisevalue of the company and divides it by estimated normalized EBITDA. EV is definedas the firm's market capitalization plus total debt, minority interest, preferred stockless cash and cash equivalents.

Financial Leverage. Based on the firm's normalized debt-to-EBITDA metric, we rank firms on the following scale: LOW, MEDIUM, and HIGH. Companies with a normalized debt-to-EBITDA ratio below 1.5 receive a LOW score, while those with a measure above 3 receive a HIGH score.

Timeliness Matrix. We compare the company's recent stock performance relative tothe market benchmark with our assessment of its valuation. Firms that areexperiencing near-term stock price outperformance and are undervalued by ourestimate may represent timely buys.

Stock Price Relative Strength. We assess the perfomance of the company's stockduring the past quarter, 13 weeks, relative to an ETF that mirrors the aggregateperformance of constituents of the stock market. Firms are measured along the scaleof STRONG, NEUTRAL, and WEAK. Companies that have outperformed themarket index by more than 2.5% during this 13-week period receive a STRONGrating, while firms that trailed the market index by more than 2.5% during this 13-week period receive a WEAK rating.

Relative Value. We compare the firm's forward price-to earnings (PE) ratio and itsprice/earnings-to-growth (PEG) ratio to that of its peers. If both measures fall below thepeer median, the firm receives an ATTRACTIVE rating. If both are above the peermedian, the firm receives an UNATTRACTIVE rating. Any other combination resultsin a NEUTRAL rating.

Cash Flow Generation. Firms' cash flow generation capacity are measured along thescale of STRONG, MEDIUM, and WEAK. A firm with a 3-year historical free cashflow margin (free cash flow divided by sales) greater than 5% receives a STRONGrating, while firms earning less than 1% of sales as free cash flow receive a WEAKrating.

Estimated Fair Value. This measure is our opinion of the fair equity value per share ofthe company. If our forecasts prove accurate, which may not always be the case, wemay expect a firm's stock price to converge to this value within the next 3 years.

Fair Value Range. The fair value range represents an upper bound and lower bound,between which we would consider the firm to be fairly valued. The range considers ourestimate of the firm's fair value and the margin of safety suggested by the volatility ofkey valuation drivers, including revenue, gross margin, earnings before interest, andenterprise free cash flow (the determinants behind our ValueRisk™ rating).

ValueCreation™. This is a proprietary Valuentum measure. ValueCreation™indicates the firm's historical track record in creating economic value for shareholders,taking the average difference between ROIC (without goodwill) and the firm'sestimated WACC during the past three years. The firm's performance is measured alongthe scale of EXCELLENT, GOOD, POOR, and VERY POOR. Those firms withEXCELLENT ratings have a demonstrated track record of creating economic value,while those that register a VERY POOR mark have been destroying economic value.

ValueRisk™. This is a proprietary Valuentum measure. ValueRisk™ indicates thehistorical volatility of key valuation drivers, including revenue, gross margin, earningsbefore interest, and enterprise free cash flow. The standard deviation of each measure iscalculated and scaled against last year's measure to arrive at a percentage deviation foreach item. These percentage deviations are weighted equally to arrive at thecorresponding fair value range for each stock, measured in percentage terms. The firm'sperformance is measured along the scale of LOW, MEDIUM, HIGH, and VERY HIGH.The ValueRisk™ rating for each firm also determines the fundamental beta of eachfirm along the following scale: LOW (0.85), MEDIUM (1), HIGH (1.15), VERY HIGH(1.3).

ValueTrend™. This is a proprietary Valuentum measure. ValueTrend™ indicates thetrajectory of the firm's return on invested capital (ROIC). Firms that earned an ROIClast year that was greater than the 3-year average of the measure earn a POSITIVErating. Firms that earned an ROIC last year that was less than the 3-year average of themeasure earn a NEGATIVE rating.

Business Quality Matrix. We compare the firm's ValueCreation™ and ValueRisk™ratings. The box is an easy way for investors to quickly assess the business quality ofa company. Firms that generate economic profits with little operating variabilityscore near the top right of the matrix.

Return on Invested Capital. At Valuentum, we place considerable emphasis onreturn on invested capital (both with and without goodwill). The measure focuses onthe return (earnings) the company is generating on its operating assets and is superiorto return on equity and return on assets, which can be skewed by a firm's leverage orexcess cash balance, respectively.

Range of Potential Outcomes. The firm's margin of safety is shown in the graphicof a normal distribution. We consider a firm to be undervalued if its stock price fallsalong the green line and overvalued if the stock price falls along the red line. Weconsider the firm to be fairly valued if its stock price falls along the yellow line.

Money Flow Index (MFI). The MFI is a technical indicator that measures buyingand selling pressure based on both price and volume. Traders typically use thismeasure to identify potential reversals with overbought and oversold levels. We use a14-week measure to rank firms along the following scale: EXTREMELYOVERBOUGHT (>90), OVERBOUGHT (80-90), NEUTRAL (20-80), OVERSOLD(10-20), EXTREMELY OVERSOLD (0-10).

Upside/Downside Volume. Heavy volume on up days and lower volume on down days suggests that institutions are heavily participating in a stock's upward advance. We use the trailing 14-week average of upside and downside volume to calculate an informative ratio. We rank each firm's U/D volume ratio along the following scale: BULLISH, IMPROVING, DETERIORATING, and BEARISH.

The information contained in this report is not represented or warranted to be accurate, correct, complete, or timely. This report is for informational purposes only and should not be considered a solicitation to buy or sell a security. Before acting on any information in this material, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Assumptions, opinions, and estimates are based on our judgment as of the date of the report and are subject to change without notice. Valuentum is not responsible for any errors or omissions or for results obtained from the use of this report. Redistribution is prohibited without written permission. To license Valuentum research, contact us at [email protected].

LEG Rating History Price Fair Value VBI3-Feb-22 $39.00 $52.00 614-May-21 $56.37 $49.00 718-Dec-20 $41.75 $47.00 422-Nov-19 $52.18 $46.00 618-Mar-19 $41.92 $42.00 65-Nov-18 $37.90 $42.00 38-Jun-18 $43.64 $46.00 69-Feb-18 $44.28 $46.00 36-Oct-17 $48.46 $46.00 67-Jul-17 $52.86 $46.00 617-Feb-17 $48.62 $43.00 312-Sep-16 $49.26 $42.00 36-May-16 $49.09 $42.00 627-Nov-15 $47.15 $42.00 6

The High Yield Dividend Newsletter portfolio, the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio are not real money portfolios. Any performance, including that in the Nelson Exclusive publication, is hypothetical and does not represent actual trading. Past performance is not a guarantee of future results.

Valuentum is an investment research publishing company.

Valuentum has not owned and does not own any shares of stocks mentioned on its website or in this report. President of Investment Research Brian Nelson does not own any shares of stocks mentioned on Valuentum's website or in this report. Majority share owner of Valuentum, Elizabeth Nelson, currently has exposure to HON in her retirement account.

If an independent contributor or employee mentions a stock he or she owns, we disclose it in the article/report that mentions the security. Please view individual articles on Valuentum's website for additional disclosures. Contact us to learn more about Valuentum's editorial policies.

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Disclosures, Disclaimers & Additional Sources

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Leggett & Platt LEG FAIRLY VALUED Buying Index™ 7 Value Rating

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