Select Comfort Stock Rises On Analyst Upgrades

Select Comfort Stock Rises On Analyst Upgrades

While Select Comfort's stock price remains lower than it was six months ago, it has recently been on a consistent climb, and analysts see additional growth potential.

Following a few months of steady increases, Select Comfort Corporation’s stock closed Monday at $25.87 per share—up nearly 50 percent from the 2013 low that it hit in early March.
 
The latest increase came Monday after analysts at Florida-based Ned Davis Research upgraded Plymouth-based Select Comfort’s stock from “neutral” to “buy.” Piper Jaffray followed suit Tuesday, boosting its target price for the company's stock from $28 to $31 and reiterating its positive rating of “overweight.” Those moves followed a similar upgrade from analysts at Zacks, who upgraded their rating of Select Comfort from “underperform” to “neutral” in a June 18 research note, according to data compiled by the Analyst Ratings Network.
 
Select Comfort’s stock closed up about 3.3 percent Monday, marking a 10 percent increase from the week prior. (It had, however, dipped 1.7 percent to $25.41 by Tuesday afternoon.)
 
Joan Storms, an analyst at California-based Wedbush Securities, Inc., told Twin Cities Business that Select Comfort’s stock had been “oversold” after the company made “two big misses”—but now it’s back on an upward trajectory as the company has solidified a plan for improving its marketing strategy, and as it continues to release new and innovative products.
 
One such product was released last month, when Select Comfort debuted its Sleep Number brand DualTemp bedding layer. The DualTemp is an independent bedding sheet that allows users to control the temperature of each individual side of their bed. The DualTemp is distinct from Select Comfort’s Sleep Number firmness technology as it can be applied to any bed.
 
Select Comfort missed analysts’ expectations during its first quarter, which ended March 30. Earnings totaled $23.2 million, or $10.41 per share, down about 10 percent from $26.1 million, or $0.45 per share, during the same period in 2012. Revenue, meanwhile, totaled $258 million, down slightly from $262 million during the same period in 2012. First-quarter revenue fell short of analysts’ projections of $288 million.
 
The company plans to release its second-quarter financial results later this month.
 
While Select Comfort’s stock has been on a consistent climb since hitting its 2013 low of $16.62 in March, it remains below its one-year high of $34.38, which it reached in September.
 
Select Comfort is one of Minnesota’s 40 largest public companies based on annual revenue, which totaled $935 million in its latest fiscal year.