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Nomura Securities Starts Tempur-Pedic (TPX) at Neutral

March 19, 2014 7:41 AM EDT
Get Alerts TPX Hot Sheet
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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Nomura Securities initiates coverage on Tempur-Pedic (NYSE: TPX) with a Neutral rating and a price target of $55.00.

Analyst Jessica Schoen said, "We believe that Tempur Sealy can return to high-single-digit top-line organic growth by the end of 2016 through innovation, market expansion, and channel synergies, as well as cost synergies from the Sealy acquisition continuing to benefit margins. However, we remain cautious due to the intensified competitive landscape of mattress manufacturers, which could negatively affect Tempur Sealy’s top-line growth and margins. We believe paying down debt related to the Sealy acquisition is likely to be the priority for the use of the expected strong free cash in the near term to return to its long-term target leverage ratio of 2.0x from its current level of 4.4x"

The firm set FY14E EPS at $2.75; FY15E EPS at $3.35.

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 $51.70 yesterday.


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