UPDATE: UBS Upgrades Sleep Number (SNBR) to Neutral
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UBS analyst Michael Lasser upgraded Sleep Number (NASDAQ: SNBR) from Sell to Neutral with a price target of $135.00 (from $65.00).
The analyst comments "Our previous bearish thesis on the stock was built on our belief that SNBR's pricing growth (ASP of $4,900) would come under pressure as online penetration grew across the industry. Plus, we thought that SNBR's 30% store exposure to malls was a risk given a declining mall traffic environment. While these risks might become evident as demand decelerates, we believe our bearish thesis is unlikely to play out in the near-term given the exceptionally strong industry demand environment. Further, SNBR's 2021 guidance implies another year of strong 20%+ EPS growth on top of the 80%+ growth it posted in 2020. We believe this should provide near-term support to its valuation. As a result, we move our rating to Neutral from Sell."
Shares of Sleep Number closed at $120.01 yesterday.
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