Title

La-Z-Boy Inc A Financial Analysis and Valuation Report

Date of Award

Spring 5-14-2021

Document Type

Project (696 or 796 registration)

Degree Name

Master of Science in Accounting & Finance

Department

Graduate Studies

Committee Chair

Mohamed Elbannen

Abstract

La-Z-Boy Incorporated is a home furnishings manufacturer and distributor headquartered in Monroe, Michigan. First established in 1927, they are most well-known for and their name is synonymous with the reclining chair. The business includes several company-owned furniture stores as well as distribution channels with a retail network of furniture stores to market their residential furniture offerings.

This paper will use gathered historical financial data for both La-Z-Boy and an industry competitor to review financial performance and upon which to base forecasted financial statements to make projections on the investment potential of the stock. Values derived with future growth estimates allowed for forecasted free cash flows that when discounted back to present value using the weighted average cost of capital, allowed for a computed projected value of the company’s stock. When comparing this calculation with the market price of the stock on April 27, 2020, La-Z-Boy is undervalued by slightly more than $10.00 per share. Because of this difference, a buy recommendation on this stock is suggested. How the company navigates the ongoing adjustments to markets and consumer demand brought about by COVID 19 will impact value over time, investors would be wise to watch to see if the results achieved by the company match expectations.

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