Although this stock has steadily climbed, its focus on higher margin products should keep its momentum going.
Tempur Sealy International, Inc. (TPX)
From BI Research
Tempur Sealy develops, manufactures, and markets mattresses, foundations, pillows, and other bedding products. The company’s brand portfolio, arguably “the best overall product portfolio in the market,” includes many highly recognized brands including Tempur, Tempur-Pedic, Sealy (Posturpedic) and Sterns & Foster. Tempur Sealy was recently ranked the best mattress company.
Last time I reported on strong Q1 results, raised guidance, record backlog due to strong demand, expansion plans, that bedding sales were “on fire” as the UK opened back up for business, and the acquisition of Dreams in the U.K which should contribute $450 million in revenues. All good stuff.
As a result, the 2021 EPS estimated has lifted from $2.42 to $2.75, while the 2022 estimate has risen to $3.16 from $2.71. The shares have pushed higher since then and are now up 89%. The shares also remain in the IBD- 50. In fact, Investor’s Business Daily gives the stock a highest possible 99 composite rating (the highest in the Furniture industry) as well as 89’s for both relative earnings strength and relative strength (of the stock). The Zacks Rank is 2.
The company announced that it was expanding capacity once again. It has selected Crawfordsville, Indiana as the site of a massive 700,000 square foot foam pouring plant with construction to begin in Q3 and production commencing in 2023. The new state of the art plant can ultimately be expanded to 1 million square feet making it the largest Tempur Sealy manufacturing facility in the world. Additionally, the company recently opened a Sealy plant in Dallas and is expecting to open a new Sherwood northeast plant and a new west coast facility later this year.
On June 28th, the Company announced that Sealy and Tempur-Pedic where named the #1 and #2 mattress brands in America.
Q2 results are due out around late July with analysts expecting $.56 on sales of $1.14 billion. Hard to believe the shares traded down to $7! last Spring when all the stores were closed and investors did not yet have a clue that the pandemic would be good for mattress sales and for that matter, almost anything found in a home as people spent more time there. The shares are up almost 500% in the 15 months since then and business is fantastic.
The BI Rank at 10.2 agrees- Buy.
Tom Bishop, BI Research, biresearch.com, July 14, 2021