Tempur Pedic Shares Rise On Analyst Upgrade

NEW YORK (AP) — Tempur Pedic International Inc. could be one of the first mattress makers to recover from the downturn, said an analyst who upgraded the stock Wednesday.

Mattress sales have sunk amid the recession, as consumers hold off on big-ticket purchases. Lexington, Ky.-based Tempur-Pedic said in July its profit dropped 17 percent as sales fell 22 percent to $185.2 million.

But SunTrust Robinson Humphrey analyst Keith Hughes said there are signs of "incremental improvement" in mattress sales and Tempur Pedic may be among the first companies to benefit.

Hughes said mattress sales over the Labor Day weekend seemed to pick up, though they are still below prior-year levels.

"The bottom line remains that mattress demand appears to be slowly ending the worst downturn in its history," he wrote. "Given a very weak fourth-quarter comparison, Tempur Pedic may be one of the first stocks in our group to see modestly up revenue."

He upgraded the stock to "Buy" from "Neutral" and established a price target of $24.

Shares rose 59 cents, or 3.4 percent, to $18.13 during morning trading. The stock has traded between $3.84 and $17.57 during the past 52 weeks.