Selected stock price target news of the day - July 3rd, 2024

By: Matthew Otto

FTC Blocks Tempur Sealy’s $4 Billion Merger with Mattress Firm Over Competition Concerns

The U.S. Federal Trade Commission (FTC) announced its intention to sue and block the proposed $4 billion merger between Tempur Sealy International and retailer Mattress Firm. Tempur Sealy had revealed the cash-and-stock deal in May 2023, aiming to incorporate Mattress Firm’s network of over 2,300 brick-and-mortar store locations. The merger would result in a combined entity with approximately 3,000 stores globally.

The FTC’s unanimous 5-0 vote to prevent the merger stems from concerns about reduced competition in the market, which includes rivals like Serta Simmons Bedding and Purple Innovation. The FTC argued that the merger could lead to higher prices for consumers and potential job losses for manufacturing workers. “This deal isn’t about creating efficiencies; it’s about crippling the competition,” remarked Henry Liu, head of the FTC’s Bureau of Competition.

Tempur Sealy emphasized that the stores it intended to acquire represent only a small fraction of the U.S. bedding retail locations. The majority of mattresses purchased in the U.S. are domestically manufactured, with sales reaching around $7.8 billion last year, compared to approximately $809 million in imports, according to the International Sleep Products Association.

Tempur Sealy had anticipated finalizing the merger this year and now aims to resolve the litigation in the coming months, potentially closing the deal by late 2024 or early 2025. In May, Tempur Sealy signed agreements with six other mattress manufacturers to continue selling their brands in Mattress Firm stores. The merger agreement includes a $50 million break-up fee for FTC issues and a cap on the number of store divestitures.

Analysts Reaffirm Positive Outlook Despite Merger Block

Wedbush Analyst Seth Basham reiterated an Outperform rating with a $66 price target.
Piper Sandler Analyst Peter Keith maintained an Overweight rating with a $61 price target.
Truist Securities Analyst Keith Hughes kept a Buy rating with a $65 price target.

Which Analyst has the best track record to show on TPX?

Analyst Keith Hughes (TRUIST) currently has the highest performing score on TPX with 21/23 (91.3%) price target fulfillment ratio. His price targets carry an average of $11.3 (21.04%) potential upside. Tempur Sealy International stock price reaches these price targets on average within 187 days.

Bank of America Poised for Growth: Analyst Upgrades on Strong Fundamentals and Promising Outlook

In a report from Seaport Research Partners, analyst Jim Mitchell upgraded Bank of America shares to a Buy rating, citing the industry’s better-than-expected deposit growth and the bank’s position to benefit from prolonged high-interest rates. Mitchell noted that BofA is currently trading at a multiple of 10.4 times earnings, which he considers inexpensive.

Additionally, Mitchell is optimistic about BofA’s management guidance, which indicates improving turnover across the bank’s loan book. This outlook is supported by the bank’s recent performance, as BofA shares have climbed about 19% this year, outperforming the S&P 500’s 15% rise.

Lastly, Mitchell has updated his per-share earnings estimates for BofA, reflecting stronger trends in investment banking and trading. Also projects higher fees from BofA’s wealth and asset management businesses and increased net interest income for the second quarter of 2024 and 2025.

Analysts Upgrade with Higher Price Targets Amid Positive Outlook

Evercore ISI Group analyst Glenn Schorr maintained an Outperform rating and raised the price target from $41 to $43.
Seaport Global analyst Jim Mitchell upgraded from Neutral to Buy and announced a new price target of $48.

Which Analyst has the best track record to show on BAC?

Analyst Scott Siefers (PIPER SANDLER) currently has the highest performing score on BAC with 3/4 (75%) price target fulfillment ratio. His price targets carry an average of $-2.68 (-6.75%) potential downside. Bank of America stock price reaches these price targets on average within 157 days.

Spirit AeroSystems’ Strategic Restructuring: Navigating Asset Sales Amidst Aerospace Realignment

Spirit AeroSystems disclosed plans to divest its operations in Prestwick, Scotland, and Subang, Malaysia, which support Airbus programs. These moves come as part of Spirit’s broader restructuring efforts to streamline its operations and optimize its portfolio amidst financial challenges.

The “Project Sparrow” initiative with Airbus underscores its efforts to offload non-core assets. This will potentially leave Airbus with ownership stakes in certain facilities if no third-party buyers emerge by mid-2025. Specifically, Spirit aims to sell its activities in Prestwick, focused on wing parts for Airbus A320, and its Subang plant, which manufactures components for Boeing’s 787 Dreamliner. Airbus has committed to acquiring core operations at Spirit’s plants in the United States, Northern Ireland, France, and Morocco.

Financially, Airbus stands to receive compensation of approximately $559 million from Spirit, contingent on final deal terms, while purchasing the assets for a nominal $1. Moreover, Spirit disclosed a cash-based program of $50 million aimed at retaining employees and incentivizing completion efforts amidst ongoing merger activities.

Analysts Downgraded Amidst Market Adjustment

Citigroup analyst Jason Gursky downgraded from Buy to Neutral and the price target from $39 to $37.25.
Barclays analyst David Strauss downgraded from Overweight to Equal-Weight and the price target from $40 to $37.

Which Analyst has the best track record to show on SPR?

Analyst Kristine Liwag (MORGAN STANLEY) currently has the highest performing score on SPR with 7/9 (77.78%) price target fulfillment ratio. Her price targets carry an average of $4.67 (16.48%) potential upside. Spirit AeroSystems stock price reaches these price targets on average within 41 days.