Ahead Of The Bell: Sealy Upgraded To 'Hold'

NEW YORK (AP) — Sealy Corp.'s stock is now fairly valued and its recapitalization has been fully accounted for, an analyst said Friday as he lifted his rating on the mattress maker.

John Baugh of Stifel Nicolaus & Co. upgraded Trinity, N.C.-based Sealy to "Hold" from "Sell," saying in a client note that the stock's recent decline puts it at a level "where there is reason to Hold the stock for the next few years, in our opinion, if the earnings recovery that we forecast occurs."

Sealy's stock is down 54 percent since the beginning of the month. It closed at $1.72 on Thursday.

Sealy's planned recapitalization, announced earlier this month, also "significantly reduces near-term liquidity pressures and extends current maturities beyond 2013," Baugh added.

"Potential covenants issues have been eliminated as a result of this restructuring, which we view as a positive in this depressed demand environment," the analyst wrote.