Somnigroup price target lowered to $96 from $106 at BofA

BofA lowered the firm’s price target on Somnigroup (SGI) to $96 from $106 and keeps a Buy rating on the shares after the company announced an agreement to acquire Leggett & Platt (LEG) in an all-stock merger for $2.5B. The firm, which thinks Leggett would be a good strategic fit and Somnigroup paid an attractive price, estimates 12% EPS accretion in 2027 pre-synergies. However, the firm lowers its 2026 EPS by 4%, in-line with the mid-point of Somnigroup’s guidance, to reflect input inflation and a tougher macro environment.