UPDATE: Longbow Upgrades Mattress Firm Holding

In a note released Friday, Longbow analyst Joshua Borstein upgraded shares of Mattress Firm (NASDAQ: MFRM) from Neutral to Buy and announced a 12-month price target of $56.Borstein said the bottom line is "accelerating growth" and "the recent sell-off of shares since late April" have created a "compelling" opportunity to increase your position in the company. Looking at specific items, Borstein noted a "successful" Memorial Day, in which he estimates sales were up 5-7 percent over the previous year and better margins anticipated in the second quarter.In regard to margins, Borstein believes the sell-off of old product in the first quarter likely put more pressure on margins than the company had expected. However, he noted that, in contrast to the norm, the sell-off of old product was contained to the first quarter. This means the company should see improved margins in the second quarter.Borstein concluded, "We expect a number of factors to drive shares higher from current levels including increased end market demand, a positive mix shift toward new higher-priced mattresses, and improving margins as the year progresses."