Somnigroup International: Buy Rating Backed by Accelerating Earnings, Strategic Leggett & Platt Acquisition, and Favorable Risk-Reward Profile

William Blair analyst Phillip Blee has maintained their bullish stance on SGI stock, giving a Buy rating on January 15.

Phillip Blee has given his Buy rating due to a combination of factors tied to Somnigroup International’s strong earnings outlook and strategic positioning. He views the proposed acquisition of Leggett & Platt as a value-creating transaction that would deepen Somnigroup’s control over the bedding supply chain and unlock opportunities to pay down debt faster and potentially return more capital to shareholders through divestitures of non-core businesses. Although he anticipates that closing the deal may require a modestly higher price than the initial $12 per share offer, he still believes the economics remain compelling, especially in light of management dynamics at Leggett & Platt that increase the likelihood of a successful transaction.

At the same time, Blee highlights that Somnigroup already trades at a premium multiple based on his 2026 EPS estimate, but he expects this valuation to be sustained or even enhanced as earnings accelerate. He forecasts that Somnigroup can grow earnings by more than 30% annually over the next several years, even without a major rebound in the broader mattress industry, with further upside if the Leggett & Platt acquisition is completed. He also points to the potential for an eventual housing market recovery to act as an additional catalyst as investors gravitate toward high-quality growth stories. While he acknowledges key risks such as Mattress Firm integration, prolonged high interest rates, softer big-ticket spending, heightened promotional activity, and macro uncertainty, he judges the risk-reward profile as favorable, supporting his Buy recommendation.

In another report released on January 15, TipRanks – Google also reiterated a Buy rating on the stock with a $104.00 price target.

Based on the recent corporate insider activity of 32 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of SGI in relation to earlier this year.