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Investing.com - Raymond (NSE:RYMD) James raised its price target on Somnigroup (NYSE:SGI) to $85.00 from $69.00 on Friday, while maintaining a Strong Buy rating following the company’s second-quarter results. The stock, currently trading near its 52-week high of $75.69, has delivered an impressive 50.58% return over the past year.
The mattress manufacturer reported non-GAAP EPS slightly ahead of expectations despite softer-than-anticipated sales due to higher intercompany eliminations. Somnigroup, now commanding a market capitalization of $15.43 billion, delivered market share gains across all three segments despite challenging industry trends. According to InvestingPro, the company has maintained consistent revenue growth, with an 8.96% increase in the last twelve months.
Raymond James noted that the early integration with Mattress Firm is progressing well, with the company already realizing both revenue and cost synergies. This positive integration prompted management to raise the mid-point of its 2025 EPS guidance, while revenue guidance remained unchanged.
The firm highlighted that Mattress Firm’s sales are shifting toward more Somnigroup products, which is having a positive impact on EBITDA and EPS. While North American industry trends remain choppy, July showed improvement compared to the second quarter of 2025.
Raymond James expressed confidence in Somnigroup’s medium-term earnings potential, citing expectations for solid EBITDA growth, strong free cash flow generation for debt reduction, and further strengthening of the company’s dominant position in the U.S. market.
In other recent news, Somnigroup International Inc. reported its Q2 2025 earnings, slightly surpassing earnings per share (EPS) expectations. The company achieved an adjusted EPS of $0.53, just above the forecasted $0.52, while its revenue for the quarter reached $1.9 billion, aligning with projections. Despite this performance, the stock experienced a dip, indicating some investor concerns. Additionally, Piper Sandler raised its price target for Somnigroup from $77.00 to $80.00, maintaining an Overweight rating. The firm emphasized the progress of Somnigroup’s integration with Mattress Firm, which is ahead of schedule. Piper Sandler also highlighted an anticipated $100 million in EBITDA from revenue synergies expected by 2026 as a key development. These recent updates provide insights into Somnigroup’s financial health and strategic initiatives.
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