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Wedbush Remains Bullish On Tempur Sealy After Checks Indicate Good Start For Tempur Breeze

Priya Nigam

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.

The Analyst

Wedbush’s Seth Basham maintained an Outperform rating on Tempur Sealy with a 12-month $74 price target.

The Thesis

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.

Price Action

Shares of Tempur Sealy declined 1.3 percent to $63.16 at the time of publication Wednesday afternoon.

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Latest Ratings for TPX

Date Firm Action From To
Apr 2019 Maintains Buy Buy
Feb 2019 Downgrades Buy Neutral
Jan 2019 Initiates Coverage On Overweight

View More Analyst Ratings for TPX
View the Latest Analyst Ratings

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