20% Upside For Steelcase?

Friday, 20 November, 2020

We believe that Steelcase Inc stock (NYSE: SCS) may be a decent opportunity at the present time. Steelcase is a US-based furniture company producing office furniture, architectural, and technology products for office environments, and to some extent in the education, health care, and retail industries. SCS stock trades at over $12 currently and is, in fact, down 39% so far this year (from more than $20 at the beginning of 2020). It traded at $19 in February 2020 – just before the coronavirus pandemic hit the world – and is currently still 34% below that level as well. SCS stock has recovered 32% of its value from its March level of over $9, compared to the S&P 500 which gained almost 60% from its March lows. With the gradual lifting of lockdowns the supply constraints are likely to ease, leading to modest improvement in sales, which could take the stock up by about 20%. However, it is unlikely to go back to its pre-Covid level due to an increase in the work-from-home culture which is leading to expectations of lower demand for office furniture. Our conclusion is based on our comparative analysis of Steelcase stock performance during the current financial crisis with that during the 2008 recession in our interactive dashboard.

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