Tempur-Pedic shares tank after Q4 results miss Wall Street view
Jan 25 (Reuters) - Shares of Tempur-Pedic International Inc (TPX.N) lost as much as a quarter of their value, a day after the mattress maker posted fourth-quarter results below Wall Street expectations, prompting at least two brokerages to cut their price targets on the stock.
Lexington, Kentucky-based Tempur-Pedic experienced a slowdown in sales after Black Friday, with retailers noting reduced traffic trends, Lehman Brothers analyst Robert Drbul said in a note to clients.
Drbul cut its price target on the home furnisher to $28 from $35, citing the slowing macroeconomic environment and expectations of flat to slightly negative industry unit volume in 2008. He has an "equal-weight" rating on the stock.
Tempur-Pedic posted a fourth-quarter profit of 52 cents a share, a penny below Wall Street view.
Net sales rose 13 percent to $289 million. Analysts were expecting $295.6 million, according to Reuters Estimates.
Stifel Nicolaus analyst John Baugh also cut his target on the company to $34 from $42. However, he urged investors to buy the the mattress maker's shares on an attractive valuation.
On a relative basis, Tempur maintained its rate of outperformance of the industry as conditions deteriorated badly over the last five weeks of the quarter, Baugh said.
Tempur-Pedic shares were trading down $4.22 at $20.69 in morning trade on the New York Stock Exchange. They touched a new year-low of $18.66 earlier in the session.
(Reporting by Dhanya Skariachan in Bangalore; Editing by Amitha Rajan)
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