UPDATE: Piper Jaffray Upgrades Tempur Sealy International as Sales Appear Poised to Accelerate
In a report published Tuesday, Piper Jaffray analyst Peter J. Keith upgraded the rating on Tempur Sealy International (NYSE: TPX) from Neutral to Overweight, and raised the price target from $50.00 to $56.00.
In the report, Piper Jaffray noted, “We are upgrading shares of TPX from Neutral to Overweight and increasing our price target from $50 to $56 based on the following: (1) Tempur International (Int'l) sales (led by Europe) recently turned positive and appear poised to accelerate in 2014; (2) Tempur's new product line refresh appears to be its best launch in several years and should drive sales improvement in 2H; and (3) TPX North America (NA) sales likely to improve once weather conditions become warmer across the U.S. Based on the contribution margin dynamics for both Tempur Int'l and Tempur NA, and our anticipated sales acceleration in each, we are increasing our 2014 and 2015 to $2.81 and $3.50, respectively.
"Our new price target is based on 16x our 2015E EPS. We have increased our multiple from 15x to 16x to reflect a faster EPS growth rate and our $56 PT equates to 10x our 2015E EBITDA.”
Tempur Sealy International closed on Friday at $48.13.
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