Investors are bidding up shares of Select Comfort SCSS Tuesday following an earlier upgrade from Longbow's Joshua Borstein. The stock last traded at $24.04, up 3.5 percent from Monday's closing price.
The firm now rates Select Comfort with a Buy rating and $31 price target, up from a Neutral rating previously.
Citing recent channel checks, Borstein noted, "since
Memorial Day through July 4 and leading up to Labor Day, retailer optimism has
gradually increased, which we believe the recent ISPA data reflects (+6.1% mattress
sales in July using a three month moving average)."
Borstein next pointed to consumer spending which is being narrowed toward the Home segment. "The recovery in bedding sales is
occurring within a larger trend of consumer spending related to the home, a trend
recently manifest by results from HD and LOW. Going forward, we believe bedding
will benefit from the continued rotation of consumer spending toward the home."
Longbow's new price target represents potential upside of about 29 percent from where the stock is trading Tuesday morning.
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