Wall Street Positive on Mattress Firm (MFRM); Don't Sleep on Shares

Shares of Mattress Firm Holding Corp. (Nasdaq: MFRM) are outperforming the broader stock market Wednesday as a number of analysts got optimistic on the stock this morning.

UBS and Barclays initiated coverage on the stock with a Buy and Overweight rating, respectively.

Another firm, KeyBanc, also started coverage on Mattress Firm with a 'Buy' rating and $28 price target.

KeyBanc's Brad Thomas made several points, including:

• proven retailer with best-in-class model: "Mattress Firm is the largest and fastest growing mattress retailer in the nation. We view the store format as a best-in-class model, with a number of advantages over its competitors, including a strong reputable brand, a broad assortment of leading brands..." (including Tempur-Pedic (NYSE: TPX) , Simmons, Sealy (NYSE: ZZ) and, more recently, Serta's iComfort);
  
• double-digit unit growth at favorable returns: "Mattress Firm has one of the highest unit growth rates within our coverage universe as it aims to become the first national mattress retailer. The Company is on plan for 100 new stores in 2011 (which represents 23% unit growth when factoring in an incremental 55 stores acquired in 4Q)";
  
• positive comp outlook driven by industry strength and share gains: "Mattress Firm's comps since 2010 have been driven by industry strength and share gains. MFRM posted a 6.1% comp in 2010 and has reported comps of at least 18% in the first three quarters of 2011"; and
  
• mattress industry offers structural advantages and a favorable outlook: "We view the mattress industry as one of the most attractive sectors within our universe. The industry continues to benefit from pent-up demand, favorable demographics, and ongoing industry premiumization, which has driven 10.6% mattress wholesale dollar growth year-to-date."

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