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Piper Jaffray Remains Bullish on Tempur Sealy (TPX); Expecting Mixed 2Q Results

July 13, 2016 7:22 AM EDT
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Price: $56.82 +1.05%

Rating Summary:
    11 Buy, 10 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
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Piper Jaffray reiterated an Overweight rating and $73.00 price target on Tempur Sealy (NYSE: TPX) ahead of the company's 2Q earnings report. Piper Jaffray estimates that TPX will report total sales of $777.3M, below the consensus estimates of $786M. Results will be driven by North America growth of +1.9% y/y and Int'l growth of +0.6 y/y, leading to consolidated growth of +1.7% y/y. However, estimates for EBITDA of $109.5M and EPS of $0.70 are above the consensus of $108M and $0.68, respectively.

Analyst Peter Keith commented, "We maintain our OW rating and $73 price target into what we view as a tricky set-up for Q2 earnings on July 28. Relative to consensus for Q2, we expect a slight sales miss and an EPS/EBITDA beat. Following completion of our June mattress survey results, we are more confident sales growth will be positive (+1% to 3%) but have concerns about Sealy (see below). We also note that 2016 appears to be a transition year for TPX shares as the company prioritizes EBITDA growth and places less emphasis on topline growth. Certainly, some weakness in topline can be attributed to emerging DTC competition, but some we believe is self-inflicted to drive more profitable sales. Finally, we can't ignore that short interest at 25% has spiked quickly and now sits at a 5-year high."

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

Shares of Tempur Sealy closed at $58.88 yesterday.



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