UBS Starts Tempur Sealy (TPX) at Neutral

UBS initiates coverage on Tempur Sealy (NYSE: TPX) with a Neutral rating and a price target of $60.00, saying improvement opportunities and stellar management balance industry risks.

Analyst Michael Lasser commented, "We see a wide range of potential outcomes for TPX's shares with the upside balancing the downside. On the positive side, TPX should see a meaningful improvement in profitability in the near term (we expect 120 bps & 140 bps of OM growth in 2H'16 & FY'17 resp.) This should be driven by solid growth in its Sealy U.S. margin (we calc. this is still 400-500 bps off its peak). That said, TPX's top-line growth will likely be muted in the NT as industry trends moderate & competition intensifies. Further, there is also a risk of lumpiness in its sales trends given the volatility in the space (its recent biz update served as a reminder). Taken together, we think risk-reward is fairly even on this stock."

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 $57.77 yesterday.

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