Thursday, 01 October, 2020
Despite more than a 35% rise from its March lows of this year, at the current price of $10 per share, we believe Steelcase Inc stock (NYSE: SCS) is undervalued. 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 has increased from $7 to $10 off its recent bottom compared to the S&P 500 which increased almost 50% from its recent lows. The stock has underperformed the market and is still 50% below its December 2019 level. 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.