BofA/Merrill Lynch Downgrades Tempur-Pedic (TPX) to Neutral

BofA/Merrill Lynch downgraded Tempur-Pedic (NYSE: TPX) from Buy to Neutral with a price target of $56.00 (from $66.00) on low visibility and lack of catalysts.

Analyst Dennis Chain noted the company posted another quarter of inconsistent results and while EPS was slightly ahead, margins were meaningfully below expectations as well as a continuation of execution missteps largely around Sealy manufacturing inefficiencies. The company also provided 2015 guidance that marks a significant deceleration in EPS growth in part due to FX.

The firm cut FY 2015 EPS from $3.35 to $3.00 and FY 2016 EPS from $4.11 to $3.66.

For an analyst ratings summary and ratings history on Tempur-Pedic click here. For more ratings news on Tempur-Pedic click here.

Shares of Tempur-Pedic closed at $55.85 yesterday.

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