Investing.com -- Bank of America reiterated its “Buy” rating on Tempur Sealy (NYSE:TPX) International Inc. as it added the stock to its top list, citing the company's resilience in a weak mattress market and significant upside potential from its acquisition of Mattress Firm.
Despite a 16% decline in U.S. mattress industry revenue from 2021 to 2024, Tempur Sealy’s North America revenue fell only 8%, as it gained market share through product innovation, marketing investments, and expanded retail distribution, BofA said.
The firm believes mattress industry volumes are near a trough, with a potential rebound benefiting Tempur Sealy and Mattress Firm. BofA’s base case sees 9% accretion from Mattress Firm in 2026, with further upside if industry volumes recover by 10% and synergies reach $200-$300 million.
"Predicting the timing of an industry inflection is difficult, but we believe the industry is near a trough," analyst at BofA said.
Tempur Sealy trades at under 20 times 2026 earnings, a discount to home improvement and furniture peers. BofA raised its price target to $79 from $73, based on 22 times core 2026 EPS plus expected Mattress Firm accretion.
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