Wedbush Raises Tempur-Pedic (TPX) to Outperform on New Products Response

Wedbush upgraded Tempur-Pedic (NYSE: TPX) from Neutral to Outperform with a price target of $70.00 (from $48.00). Analyst Joan Storms noted positive initial response to new products.

"Upgrading TPX to OP based upon confirmation of positive retailer response to new products for TPX-NA, which was our thesis for the trigger point on the stock," said Storms.

"We had been positive on the new TPX-NA product, which we believed held the potential for a rejuvenation to NA sales, and felt that this was the key to multiple expansion. Shipments came in ahead of schedule and our checks with major retailers confirmed new beds were hitting retail floors. The good news is that slots per store is increasing, as are distribution points, which provides good visibility for future sales increases. In addition, TPX-Int’l was BTE and trending positively, while Sealy's business continued to improve and should be buoyed by new products at S&F and Optimum. While traffic at mattress retailers has been choppy, we remain optimistic that TPX's new products with nice aesthetics, in-store marketing, and increased ad spend will help TPX and industry sales overall starting this spring/summer selling season and continue LT with stronger international sales growth including with the early buybacks of Sealy Int’l licensees from Japan and Continental Europe. We see improved visibility for benefits from the merger, including the company’s industry positioning as the largest global player with the
most well-known brands, ongoing product innovation, and strong cash flows to support growth while paying down debt," she added.

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 $50.55 yesterday.

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