) to buy from hold.
Analyst Joel Havard says his upgrade is based on the company's business realignment to better compete in the global residential furniture industry. He notes the company took a $70 million goodwill writedown for its wood operations in the fourth quarter. Then, in its latest quarter, the company announced a plan to close 5 U.S. manufacturing plants in favor of importing most of its casegoods from overseas.
Havard also notes that La-Z Boy shares are at a 7-year low, while the company's dividend is at a 10-year high. He says the upgrade preceeds the release of second-quarter results this evening and a conference call tomorrow. He sees 13 cents second-quarter operating earnings per share, 95 cents fiscal 2005 (Apr.) earnings per share, and $1.45 fiscal 2006 earnings per share. He set an $18 price target on the shares.