In a report released today, Rafe Jadrosich from Bank of America Securities maintained a Buy rating on Somnigroup International (SGI – Research Report), with a price target of $79.00.
Rafe Jadrosich has given his Buy rating due to a combination of factors that highlight Somnigroup International’s potential for growth and market outperformance. Despite a soft mattress industry demand, the company is poised to benefit from a positive demand shift observed in late 2024, which occurred without significant advertising efforts. This suggests a resilience in consumer interest that could drive future sales, particularly as the company anticipates a balanced industry trend with slight improvements in the latter half of the year.
Furthermore, SGI’s strategic initiatives, such as the relaunch of Sealy products, expansion of direct-to-consumer channels, and international distribution, are expected to contribute to another year of industry outperformance. The company is also set to achieve substantial cost synergies from its Mattress Firm acquisition, enhancing operational efficiency. Additionally, SGI’s robust marketing budget and access to extensive customer data provide opportunities to optimize advertising effectiveness, further supporting the Buy rating with a price objective of $79.00 USD.
Jadrosich covers the Consumer Cyclical sector, focusing on stocks such as Somnigroup International, DR Horton, and KB Home. According to TipRanks, Jadrosich has an average return of 6.6% and a 50.85% success rate on recommended stocks.
In another report released on March 11, Raymond James also maintained a Buy rating on the stock with a $67.00 price target.
Questions or Comments about the article? Write to editor@tipranks.com