Memorial Day weekend mattress sales checks indicate favorable trends for Tempur Sealy International Inc’s (NYSE: TPX) products and indicated its new high-end Tempur Breeze product was gaining traction, according to Wedbush.
Wedbush’s Seth Basham maintained an Outperform rating on Tempur Sealy with a 12-month $74 price target.
Basham said checks suggest mid-single-digit year-on-year growth for Tempur Sealy's products, while increased traction for Tempur Breeze will help boost average selling prices.
The sales trends were favorable despite a slight pullback in promotions across the industry. The company’s sales and margin trends seem to be on track for the second quarter, “with more upside than downside risk,” the analyst wrote in the note.
Meanwhile, longtime business partner with which Tempur Sealy has shared an estranged relationship over the past couple of year, Mattress Firm (NASDAQ: MFRM) appointed a new CEO, John Eck. Basham views the news as positive, although he mentioned this doesn't change the expectation of the two companies arriving at a distribution agreement in the coming months.
Shares of Tempur Sealy declined 1.3 percent to $63.16 at the time of publication Wednesday afternoon.
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|Jan 2019||Initiates Coverage On||Overweight|
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