Core Insights - HNI Corporation is identified as a promising investment opportunity for 2026, with Benchmark Co. raising its price target from $60 to $75 per share while maintaining a Buy recommendation [1][2] Group 1: Financial Performance and Projections - HNI Corporation announced plans to acquire Steelcase Inc. for an enterprise value of approximately $2.2 billion, with expected annual cost synergies of around $120 million post-integration [2] - The acquisition is projected to enhance HNI's earnings per share by $0.50 to $0.60 by fiscal year 2027 [2] - HNI's current price-to-earnings ratio stands at 13.35, indicating that the stock is priced below its historical values, suggesting potential for profit growth [3] Group 2: Operational Changes - HNI plans to close its manufacturing facility in Wayland, New York, by 2027, impacting about 135 jobs [4] - The company will continue to produce products currently made at the Wayland plant at other locations, with no expected changes to product quality or lineup [5] - Annual cost savings from this consolidation are estimated to be between $7.5 million and $8 million once fully implemented [5] Group 3: Company Overview - HNI Corporation specializes in manufacturing workplace furnishings and residential building products, including furniture systems, seating, and fireplaces [6]

Market Overview - The S&P 500 index briefly crossed 7000 points for the first time on January 28, 2026, rebounding nearly 40% since April 2025 lows, with five record closes noted by January 27, 2026 [1] - The Nasdaq Composite has seen modest gains in 2026, while the Russell 2000 has surged nearly 7% year-to-date as of January 29, 2026, outperforming large-cap peers for 14 consecutive trading sessions, the longest streak since 1996 [2] Valuation Concerns - The Shiller S&P 500 price-to-earnings ratio is currently at 41, the highest since the dot-com bubble, while the trailing P/E ratio is at 31.52, significantly above the historical average of 16.2 [3] - Bank of America's head of US equity strategy, Savita Subramanian, indicates that the S&P 500 is expensive, predicting it will reach 7,100 by year-end 2026, which is among the lowest forecasts on Wall Street [3] Investment Strategy - Goldman Sachs analysts predict that value stocks will remain favored if US economic momentum strengthens, noting that these stocks, with forward P/E ratios below 15, have outperformed higher-valuation stocks at the start of the year, achieving a 15% return in the last six months of 2025 [4] Stock Selection Methodology - The list of best cheap stocks for 2026 was created using screeners like TradingView and Finviz, focusing on US-listed stocks with forward P/E ratios between 3 and 15 and a positive upside potential of at least 20%, ranked by hedge fund holdings as of Q3 2025 [7][8] HNI Corporation - HNI Corporation (NYSE:HNI) is highlighted as a top cheap stock for 2026, with a forward P/E of 11.92 and an upside potential of 58.46% [9] - Benchmark Co. raised its price target for HNI to $75 per share from $60, citing a planned acquisition of Steelcase Inc. valued at approximately $2.2 billion, expected to yield annual cost synergies of about $120 million [10] - HNI's shares are priced below historical values, with a P/E ratio of 13.35, and the company has a history of consistent dividend payments over 55 years [11] Sanofi SA - Sanofi SA (NASDAQ:SNY) is also listed as a cheap stock for 2026, with a forward P/E of 9.02 and an upside potential of 25.11% [15] - Citi Research initiated coverage on Sanofi with a Neutral rating and an €85 price target, expressing concerns over pipeline setbacks affecting long-term growth [16] - Sanofi's current valuation reflects these setbacks, with analysts noting that the market is unlikely to reward the stock with a higher multiple without evidence of pipeline improvement [17] - Positive results were reported for Sanofi's experimental medicine amlitelimab in Phase 3 clinical studies for atopic dermatitis, indicating potential for future growth [18]

Core Viewpoint - HNI Corporation has announced a definitive agreement to acquire Steelcase, Inc. in a cash and stock transaction, aiming to enhance customer reach and drive long-term profitable growth through their complementary brand portfolios and dealer networks [1]. Group 1: Acquisition Details - The acquisition is expected to close in the fourth quarter of 2025, subject to customary closing conditions [1]. - On a pro forma basis, the combined company had net sales of approximately $5.7 billion for the year ended December 28, 2024 [1]. Group 2: Exchange Offer - HNI has commenced an offer to exchange any outstanding 5.125% Notes due 2029 issued by Steelcase for up to $450 million aggregate principal amount of new notes to be issued by HNI [2]. - The New HNI Notes will have identical interest rates and maturity dates as the Existing Steelcase Notes [2]. Group 3: Financial Terms - Eligible holders of Existing Steelcase Notes can receive a Consent Payment of $2.50 per $1,000 principal amount, along with an Exchange Consideration of $970 for each $1,000 principal amount of New HNI Notes [3][9]. - The Total Exchange Consideration includes the Consent Payment and Early Tender Payment, which is $1,000 for each $1,000 principal amount of Existing Steelcase Notes [3][9]. Group 4: Consent Solicitation - HNI is soliciting consents to amend the Steelcase indenture to eliminate certain covenants and restrictive provisions [6]. - Eligible holders must validly deliver their related consents to receive the Consent Payment [4][7]. Group 5: Guarantors and Security - The New HNI Notes will be guaranteed by various subsidiaries of the combined company and will be secured by substantially all tangible and intangible assets [12]. - The New HNI Notes will rank equally in right of payment with existing and future indebtedness that is not subordinated [12]. Group 6: Conditions and Timeline - The consummation of the acquisition is conditioned upon shareholder approvals, antitrust approvals, and other customary closing conditions [14]. - The Exchange Offer and Consent Solicitation will expire on October 27, 2025, unless extended [8][10].