UBS Starts Select Comfort (SCSS) at Sell

September 29, 2016 6:58 AM EDT
Get Alerts SCSS Hot Sheet
Price: $18.99 -12%

Rating Summary:
    4 Buy, 6 Hold, 2 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 14 | Down: 19 | New: 11
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UBS initiates coverage on Select Comfort (NASDAQ: SCSS) with a Sell rating and a price target of $20.00, saying while it is a strong niche player, its positioning is awkward.

Analyst Michael Lasser commented, "We understand the allure of SCSS' bull case w. easy NT compares due to idiosyncratic factors, well-regarded products & further store growth. This is transposed against a rich history of private market activity in the space. However, we think these considerations are more than offset by increasing competition, reliance on existing customers (1/3 sales are to repeat customers/referrals), susceptibility of its biz model to external shocks, less operating flexibility, & lofty expectations. The consensus assumes 10% sales growth & 120 bps of OM expansion in '17. Plus, we doubt SCSS can continue to push AUP higher (already at $4,206) in a consolidating & increasingly transparent market."

For an analyst ratings summary and ratings history on Select Comfort click here. For more ratings news on Select Comfort click here.

Shares of Select Comfort closed at $22.82 yesterday.

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