Somnigroup International (SGI) continues to gain share and expand its margins despite a challenging bedding industry backdrop marked by soft volumes, BofA Securities said in a note Wednesday.

Mattress industry volumes fell about 5% in Q4, but the company outperformed, with like-for-like wholesale revenue growing 6%, excluding headwinds from a customer bankruptcy, according to the note.

Somnigroup's 2026 EPS guidance in the range of $3 to $3.40, which is about 4% below consensus, seems conservative and embeds modest assumptions, BofA said, adding it is also lowering its EPS estimate for the year by about 2%.

"We think guidance leaves room for upside," the investment firm said.

BofA maintained its buy rating on the stock and lowered its price target to $106 from $110.

Shares of Somnigroup were up 2.6% in recent trading Wednesday.

Price: 90.05, Change: +2.27, Percent Change: +2.58