TPX

Tempur Sealy International Inc

Consumer


Presented:12/05/2023
Price:$43.45
Cap:$7.49B
Current Price:$50.47
Cap:$8.76B

Presented

Date12/05/2023
Price$43.45
Market Cap$7.49B
Ent Value$10.86B
P/E Ratio19.59x
Book Value$1.24
Div Yield1.01%
Shares O/S172.27M
Ave Daily Vol1,801,912
Short Int10.07%

Current

Price$50.47
Market Cap$8.76B
Tempur Sealy International, Inc. develops, manufactures, markets, and distributes bedding products. It operates through the North America and International segments. The North America segment consists of Tempur and Sealy manufacturing and distribution subsidiaries, joint ventures and licensees located in the U.S. and Canada. The International segment consists of Tempur and Sealy manufacturing and distribution subsidiaries, joint ventures and licensees located in Europe, Asia-Pacific and Latin America. Its products include mattresses, adjustable bases, pillows and other sleep and relaxation products. The firm's brands include Tempur, Tempur-Pedic, Sealy, featuring Posturepedic Technology, and Stearns & Foster. The company was founded by Robert B. Trussell, Jr. in 1991 and is headquartered in Lexington, KY.

Publicly traded companies mentioned herein: Tempur Sealy International Inc (TPX)

Highlights

The presenter is long shares of Tempur Sealy International Inc (TPX), which is the leading mattress manufacturer in North America. While the company may seem like a COVID over-earner based on a quick glance at the EBIT trends since 2019, it has been aggressively increasing its market share over that timeframe, which he expects to continue over the next 2 – 3 years despite ongoing industry weakness. This market share opportunity is amplified by TPX’s announced acquisition of Mattress Firm, the #1 mattress retailer in the US. At $43 per share, the stock trades at 15x his 2024 EPS, which doesn’t assume a recovery in industry demand or any contribution from Mattress Firm. Looking further out, he models ~$6 of EPS in 2026 for the pro forma company, creating 100%+ upside without multiple expansion or a major industry snapback.

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Idea Discussion

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