Select Comfort: We See Limited Visibility For A Material Turnaround, Says Wedbush


In a research report released yesterday, Wedbush analyst Joan Storms maintained a Neutral rating on Select Comfort (SCSS) with a $17 price target, due to a lack of catalysts to drive the stock higher in the near term.

Storms noted, “We are encouraged that for Q1, the company met quarterly expectations for the first time in six quarters. However, given a still tough competitive environment with a challenged consumer and promotional activity, we see limited visibility for a material turnaround in the business until later this year. We believe management credibility should remain in the penalty box until more consistent results are achieved and investors get their arms around new senior management changes, including a new CFO and CMO, and the timing for them to be able to affect change”.

The analyst continued, “Select Comfort is working to improve its marketing effectiveness by 1) introducing a new advertising campaign called “No Better Sleep”, 2) adjusting marketing mix, and 3) recently hiring a new CMO. New product introductions for 2014 include the rollout of the company’s new x12 Sleep IQ technology across the entire mattress line, a new Classic Series bed, an expanded line of FlexFit adjustable bases, and anew mattress line called the FlexTop. We are cautiously optimistic these initiatives will build throughout 2014”.

According to TipRanks.com, which measures analysts and bloggers success rate based on how their calls perform, analyst Joan Storms currently has a one-year average return of -0.5% and an 52% success rate. Storms is ranked #2590 out of 3211 analysts.

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