Piper Jaffray Comments On Tempur-Pedic EPS Beat

Tempur-Pedic TPX remains among its high conviction names following another outstanding quarter of revenue growth, margin expansion and earnings growth. Execution continues to be excellent and is increasing its CY11 earnings estimates. Specifically, its new CY11/CY12 EPS estimates are now $2.71/$3.20. Guidance on 2011 was very impressive and the company announced another $200M share repurchase authorization. Overall, 2010 was a terrific year of fundamental improvement and its confidence in the story is at an all time high. Piper reiterates its Overweight investment rating - $51 Price Target. New product introductions and a highly effective marketing message are driving material share gains for TPX. The company grew sales by 33% in 2010 within an industry growing at single-digits. The company is in the early stage of an aggressive marketing push into Western Europe, which should weigh modestly on operating margins in the short-term, but we anticipate will reignite international growth beginning in 2Q11. TPX closed Thursday at $39.40