UBS has revised its price target for Somnigroup (SGI, Financial), reducing it from $81 to $75, while maintaining a Buy rating on the company's shares. Despite some fluctuations in Somnigroup's first-quarter results, the analyst highlights that the company's core strengths remain solid and reassuring for investors.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 8 analysts, the average target price for Somnigroup International Inc (SGI, Financial) is $74.50 with a high estimate of $80.00 and a low estimate of $62.00. The average target implies an upside of 24.32% from the current price of $59.93. More detailed estimate data can be found on the Somnigroup International Inc (SGI) Forecast page.
Based on the consensus recommendation from 10 brokerage firms, Somnigroup International Inc's (SGI, Financial) average brokerage recommendation is currently 1.7, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Somnigroup International Inc (SGI, Financial) in one year is $44.80, suggesting a downside of 25.24% from the current price of $59.925. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Somnigroup International Inc (SGI) Summary page.
SGI Key Business Developments
Release Date: May 08, 2025
- Net Sales: $1.6 billion for Q1 2025.
- Adjusted EPS: $0.49 for Q1 2025.
- International Sales Growth: 6% reported, 8% constant currency.
- Tempur Sealy North America Sales: Like-for-like net sales down 3%.
- Mattress Firm Sales: Like-for-like sales down 1%.
- North American Adjusted Gross Margin: Increased 760 basis points to 45.3%.
- International Gross Margin: Improved 130 basis points to 49%.
- Consolidated Debt Less Cash: $5 billion.
- Operating Cash Flow: $106 million for Q1 2025.
- 2025 Adjusted EPS Guidance: Revised to $2.30 to $2.65.
- 2025 Sales Guidance: $7.3 billion to $7.5 billion on a reported basis.
- 2025 CapEx: Approximately $225 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Somnigroup International Inc (SGI, Financial) reported net sales of approximately $1.6 billion and adjusted EPS of $0.49, outperforming the US bedding market.
- The international business showed strong performance with mid-single-digit sales growth, and high-single-digit growth when excluding FX impacts.
- The new Tempur product collection expanded distribution by over 10% with third-party retail partners, driving growth.
- The acquisition of Mattress Firm is expected to generate at least $100 million in annual run rate synergies by 2028, with $15 million anticipated in 2025.
- SGI's mitigation strategy for tariffs includes domestic manufacturing and supplier collaboration, reducing potential tariff impacts by half.
Negative Points
- The US bedding market was down high single digits, impacting SGI's expectations.
- Like-for-like net sales for Tempur Sealy North America declined 3% in the quarter.
- SGI anticipates a one-time tariff-related headwind of approximately $5 million in the second quarter of 2025.
- The company revised its 2025 guidance, lowering adjusted EPS expectations due to a decline in US consumer confidence.
- Gross margins are expected to be slightly above 44%, down from previous expectations of 45% due to revenue deleverage and tariff impacts.
