Raymond James Remains Bullish On Tempur Sealy On Solid Set-Up For Growth In 2023

Raymond James analyst Bobby Griffin reiterated a Strong Buy rating on the shares of Tempur Sealy International Inc TPX and raised the price target from $45 to $49.
Q4 sales came in modestly below consensus expectations, while adjusted EBITDA was relatively in line and adjusted EPS beat consensus.
While demand remains challenging, it appears the industry is stabilizing, and Tempur Sealy continues to perform well on a relative basis, added the analyst.
Equally important, while the midpoint of 2023 EPS guidance is modestly below consensus, when adjusting for incremental interest expense and a higher share count, the actual earnings power of the business in 2023 is above prior consensus expectations, the analyst said.
Even with the current macro environment, 2022/early 2023 could mark the low point in earnings for TPX, especially if inflation continues to modestly moderate in 2023, positioning Tempur Sealy well to grow earnings in 2H23 and 2024, the analyst remarked.
The analyst continues to view the risk/reward set-up favorably, given the solid earnings growth potential of the business over the medium to long-term.
On a longer-term basis, the analyst continues to believe that Tempur Sealy will benefit from its expanding DTC business, international expansion opportunities, new product introductions, and robust/consistent cash flow generation.
Price Action: TPX shares are trading lower by 1.18% at $41.03 on the last check Friday.

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