Analysts reconsider ratings for O’Reilly, Leggett

A JPMorgan analyst upgraded Springfield-based O’Reilly Automotive (Nasdaq: ORLY) to “overweight,” citing a growing demand for its do-it-for-me auto repair services and expected cost savings from its recent acquisition of CSK Auto Corp., according to the AP.

Meanwhile, Moody’s Investors Service placed Carthage-based Leggett & Platt’s (NYSE: LEG) A2 long-term rating and Prime-1 commercial paper rating on review for possible downgrade, the AP said in a separate report.

Moody’s said it is concerned that Leggett’s financial leverage will stay elevated during the medium term because consumer spending is expected to remain sluggish.

“While we believe Leggett’s vertically integrated manufacturing processes provide them with a substantial competitive advantage, the ongoing housing and credit market crises show no signs of receding and, in fact, may get worse over the next year or two, leading to lower than expected profitability and cash flow levels,” Moody’s Senior Credit Officer Kevin Cassidy told the AP.

Moody’s review will focus on the outlook of Leggett’s profitability and cash flow generation and analyze its use of proceeds from its planned divestitures, according to the report. The downgrade should not exceed one notch, Moody’s said.