Even After 30% Drop, Analyst Says Tempur Sealy Has More Downside

A horrendous 2018 went from bad to worse for Tempur Sealy International Inc (NYSE: TPX) on Monday after the stock received another analyst downgrade.

The Analyst

Loop Capital analyst Laura Champine downgraded Tempur Sealy from Hold to Sell and lowered her price target for the stock from $49 to $36.

The Thesis

Even after a 31 percent sell-off year-to-date, the analyst thinks things will likely get worse for Tempur Sealy investors before they get better. Champine said in a note that Loop's most recent round of vendor checks haven't been positive for Sealy, and Mattress Firm’s highly promotional sales approach is likely not helping the situation.

Champine doesn't expect Tempur Sealy will regain Mattress Firm as a customer anytime soon, and there are simply too many hurdles ahead for the company at this point to expect much out of the stock.

Loop reduced its Q1 EPS estimate to 47 cents, down more than 50 percent from a year ago.

Price Action

Tempur Sealy was down about 2.5 percent at $42.92 at time of publication.

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