Piper Jaffray, Oppenheimer Say Buy the Dip in Tempur-Pedic (TPX); Shares Up 7%

May 9, 2012 11:46 AM EDT
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Price: $67.02 +4.47%

Rating Summary:
    6 Buy, 12 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 19 | Down: 19 | New: 13
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Investors in Tempur-Pedic (NYSE: TPX) are finally getting some relief Wednesday morning following a nearly 15 percent decline on Monday and a 3.5 percent decline on Tuesday. The stock last traded at $49.80, up about 7 percent on the session.

The downside was related to news of a rare holiday promotion for the mattress maker. The company will offer a discount of approximately 12-17 percent off the suggested retail price of a TEMPUR-Cloud™ Supreme mattress set, which is one of the three beds in its TEMPUR-Cloud® Collection.

Helping push the stock higher Wednesday, several analysts issued reassuring notes on Tempur-Pedic this morning.

Piper Jaffray's Peter Keith said the recent decline in Tempur-Pedic shares is an "overreaction," noting the promotion was actually included in the guidance the company gave three weeks ago. Keith believes the deal will reduce second-quarter earnings by 3-4 cents per share at most. The analyst also added the drop may have intensified as the company's CFO and Investor Relations were on a flight Monday and unable to respond to the speculation. Keith reduced his price target on Tempur-Pedic shares from $100 to $95, but maintains an Overweight rating.

Elsewhere, Oppenheimer's Joseph Altobello told clients to use the recent drop as a buying opportunity. The analyst maintains an Outperform rating but cut his price target from $90 to $75.

To track all the market-moving analyst comments on shares of Tempur-Pedic, visit our Analyst Ratings page.

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