As 2013 begins, now's a good time to look at the future prospects for the stocks you own. If you don't know where a company's headed in the next year and beyond, then it's impossible to make an informed decision about whether you should add the stock to your portfolio -- or sell it if you already own it.
Today, I'll look at Tempur-Pedic (TPX 4.47%). The mattress maker had a nightmare year in 2012 as economic woes hurt sales and put an abrupt stop to the company's fast growth. But with things starting to look marginally better on the economic front, especially in housing, can the stock bounce back? Read on for more about Tempur-Pedic's prospects for 2013.
Stats on Tempur-Pedic
|
Average Stock Target Price |
$33.57 |
|
Full-Year 2012 EPS Estimate |
$2.55 |
|
Full-Year 2013 EPS Estimate |
$2.72 |
|
Full-Year 2012 Sales Growth Estimate |
(1.2%) |
|
Full-Year 2013 Sales Growth Estimate |
2% |
|
Forward P/E |
12.7 |
Source: Yahoo! Finance.
Will Tempur-Pedic let you sleep better in 2013?
Analysts don't see a quick rebound for Tempur-Pedic in the coming year. Already, the stock trades above the average target price, and the projections for earnings-per-share growth in 2013 won't get the company even close to its 2011 levels.
The primary culprit for Tempur-Pedic's weak performance has been poor demand throughout the industry. Last month, Mattress Firm (NASDAQ: MFRM) had to cut back on its full-year guidance, with a big cut in earnings per share accompanied by a small miss on sales estimates suggesting that the company was having to discount its merchandise more than expected. Tempur-Pedic and Select Comfort (SCSS 9.73%) both sank in sympathy, but Tempur-Pedic has been the company to see the most long-term damage to its stock price throughout the year.
To reverse that trend, Tempur-Pedic hopes that its purchase of Sealy (NYSE: ZZ) will help it diversify its offerings beyond the high-end luxury space. Sealy has more of a mid- to lower-end focus to it, and if that end of the market picks up with the housing market, then having that segment covered will help Tempur-Pedic rebound faster.
For 2013, all the points that Fool analyst Anand Chokkavelu raised in his in-depth look at Tempur-Pedic last May still hold true. You're just getting a better entry point for buying shares, and if a stronger recovery takes hold, Tempur-Pedic should benefit as much as or more than any of its peers in the industry.
Click here to add Tempur-Pedic to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.
