Loop upgrades Tempur Sealy after adding Mattress Firm to model

Loop Capital upgraded Tempur Sealy to Buy from Hold with a price target of $75, up from $50. The analyst upgraded the shares after folding in the potential financial impact from the Mattress Firm acquisition into the model. The firm’s price target incorporates the value for the Mattress Firm acquisition starting in 2025. The Buy rating assumes the Mattress Firm acquisition closes, and Loop has more confidence in this following the company’s March 12 press release announcing that Tempur has reached an agreement with Purple and providing a Q2 timeframe for the end of the FTC’s review. The acquisition is likely to involve some divestitures of Mattress Firm stores, and the $75 price target assumes about $300M of sales are divested, the analyst tells investors in a research note.