TEMPUR-PEDIC $49.38 - New York symbol TPX

TEMPUR-PEDIC $49.38 (New York symbol TPX; TSINetwork Rating: Speculative) (800- 878-8889; www.tempurpedic.com; Shares outstanding: 63.8 million; Market cap: $3.2 billion; No dividends paid) reported higher sales and earnings in the latest quarter. However, the company’s earnings estimate for 2012 was below expectations. The stock has since dropped 41%.

In the three months ended March 31, 2012, Tempur-Pedic’s earnings per share rose 26.5%, to $0.86 from $0.68. Sales rose 18.0%, to $384.4 million from $325.8 million.

Tempur-Pedic expects to earn $3.80 to $3.95 a share in 2012 on revenue of $1.6 billion to $1.65 billion. That’s below the consensus estimate of $3.97 a share on revenue of $1.66 billion.

With the price drop, the stock now trades at a reasonable 12.7 times the midpoint of Tempur-Pedic’s forecast 2012 earnings.

However, for now, we still see Tempur- Pedic as a hold.

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