Guggenheim analyst Robert Drbul maintained a Buy rating on Tempur Sealy (TPX) today and set a price target of $55. The company’s shares closed on Friday at $42.21, close to its 52-week low of $38.90.
Drbul noted:
“We believe this could be a win/win for both parties and is an increasingly plausible outcome in 2019. Firm was TPX’s largest retail partner (21% of sales); this selling relationship came to an end in Jan. 2017. The partnership offered relatively weak economics for TPX, while Mattress Firm also had points of contention with TPX; for TPX, we believe a reunion could drive higher sales with more favorable/profitable terms. The parties’ business had been on the decline at that time, with peak TPX sales at Mattress Firm above that 21% level. In early 2015, TPX was engaged by H Partners, leading to the introduction of the “Aspirational Plan”, which included a FY17 EBITDA target of $650mn (~ $200mn above FY15 levels, or an ~40% increase). In ’15/’16, TPX focused on operational improvements/cost control, helping to drive an increase in adj.”
According to TipRanks.com, Drbul is a 5-star analyst with an average return of 7.7% and a 58.8% success rate. Drbul covers the Services sector, focusing on stocks such as National Vision Holdings Inc, Capri Holdings Limited, and Ascena Retail Group.
Currently, the analyst consensus on Tempur Sealy is a Moderate Buy with an average price target of $57.67.
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Tempur Sealy’s market cap is currently $2.3B and has a P/E ratio of 16.79. The company has a Price to Book ratio of 10.98.
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Tempur Sealy International, Inc. develops, manufactures and markets and distributes bedding products. Its products include mattresses, adjustable bases, pillows and other sleep and relaxation products. It operates through North America and International segments.
