Somnigroup International (SGI) is expected to benefit from further growth and earnings accretion from its Leggett & Platt acquisition, BofA Securities said in a note Thursday.

Management expects the transaction to add $0.35 to $0.40 to annualized EPS before synergies, with about $25 million in synergies expected in 2027 and the full $75 million annual target reached over three years, according to the note.

Leggett is expected to contribute $1.2 billion to $1.25 billion in revenue and about $120 million in adjusted EBITDA for the remainder of 2026, with Q4 revenue and EBITDA expected to return to growth, BofA said.

The analysts said the deal strengthens Somnigroup's vertical integration, with internal sourcing of US spring requirements expected to exceed 90% from 2027, up from about 80% previously.

BofA maintains its buy rating on the stock, while raising its price target to $81 from $78.

Shares of Somnigroup rose more than 2% in Thursday trading.

Price: 69.53, Change: +1.71, Percent Change: +2.52