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Sloth: Tempur Sealy

tempur185Tempur Sealy International (TPX) — the result of consolidation in the sleep industry bringing together Tempur-Pedic and Seayl — might market itself as a seller of fancy mattress made from NASA-researched material that will adjust to your form, but let’s be real: It’s just another way to get shut-eye.

There’s a fine line between getting the sleep we need, and staying curled up in bed all day watching TV and drifting off. I’ve never indulged in a Tempur-Pedic bed, but having a mattress that forms to your form seems like a recipe for the latter.

TPX stock might soon be struck with a case of sloth, too. While Tempur Sealy’s sales are expected to double year-over-year this quarter and next, that’s just because two brands are obviously better than one … but that’s not expected to trickle down to the bottom line, where growth for the year is expected to come in at a meager 6%.

Tempur’s stock has soared more than 83% during the past year, and 28% year-to-date thanks to the acquisition. That run-up still leaves TPX at a fair value — it’s trading at 12 times forward earnings, while five-year growth estimates also around 12% — but doesn’t seem to leave much room for continued outperformance.

Article printed from InvestorPlace Media,

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