Tempur Sealy Shares See Downside Following Sell-Side Downgrade

Shares of Tempur Sealy International Inc

are down on Wednesday afternoon, after research firm Tigress Financial Partners downgrading its rating from Strong Buy to Buy. The main reason behind this demotion is the prospect of deceleration in performance metrics in 2015. The company forecasts 2015 net top line growth of between 2 percent and 5 percent, a deceleration of the 8 percent sales growth seen in 2014 -- had they owned Sealy's for all of 2013. Despite this downgrade, the firm continues to believe "margin improvement, favorable discretionary income trends in the U.S. and international growth potential will drive economic profit growth and increasing shareholder returns albeit at a reduced rate." The report points out two key issues. (1) "Beyond synergy related cost improvements from the Sealy's acquisition, management believes it has a strong runway to drive EBITDAR improvement at Sealy's through 2018 on a standalone basis too;" and (2) "Leveraging iconic brand portfolio will be the key to driving long term growth."