UPDATE: Hillard Lyons Upgrades Tempur-Pedic to Buy; Shares Trading at Discount

Hillard Lyons raises its rating on Tempur-Pedic

from Long-Term Buy to Buy and reduces its price target from $70 to $35. Hillard Lyons says, "The shares are currently trading at discounts to five-year median multiples averaging ~50% vs. current and forward forecasts. As such, we are increasing our rating on TPX to Buy with a 12-month target price of $35. That compares to our previous Long-term Buy rating with a 24-month price target of $70. Our revised target values the shares at 10.3x FY'13E earnings and 5.4x EV / FY'13E EBITDA, a ~40% average discount to the historical median multiples which we believe is compelling given the company's free cash flow margin potential and free cash flow yield following the sell-off." TPX closed at $22.39 on Thursday.