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UPDATE: Wedbush Maintains Tempur-Pedic International at Neutral Following Sealy Deal

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Wedbush reiterated its Neutral rating and $27 price target on Tempur-Pedic International (NYSE: TPX) following agreement to purchase Sealy (NYSE: ZZ).

Wedbush commented, "The acquisition should be accretive during the first year, and the company expects annual operating cost savings of $40 million by the third year. In addition to operational cost savings (primarily through purchasing and supply chain), Tempur-Pedic has been able to refinance Sealy's debt obligations for a much lower interest rate, and it expects to reduce the company's combined leverage to an optimal level within four to five years. … Many questions remain as to what level of integration the combined company will pursue, and how this may affect future financial results."

Tempur-Pedic International closed at $30.33 on Thursday.

Latest Ratings for TPX

DateFirmActionFromTo
Jul 2014NomuraMaintainsNeutral
May 2014KeyBancMaintainsBuy
May 2014WedbushUpgradesNeutralOutperform

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Posted-In: WedbushAnalyst Color News Reiteration M&A Analyst Ratings

 

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