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Jefferies stands out with huge Mattress Tub goal worth hike By Reuters



© Reuters. FILE PHOTO: A buyer walks right into a Mattress Tub & Past retailer in Novi, Michigan, U.S., January 29, 2021. REUTERS/Emily Elconin/File Photograph

By Svea Herbst-Bayliss and Noel Randewich

(Reuters) – Jefferies analysts practically doubled their worth goal on Mattress Tub & Past (NASDAQ:) this week, taking the alternative view from different brokerages on the identical day the struggling retailer disclosed it had tapped Jefferies funding bankers for a inventory sale.

Brokerages usually have a strict separation between fairness analysts protecting firms and funding bankers working for them. There isn’t any suggestion that Jefferies’ analysis observe on Mattress Tub and the financial institution’s hiring by the corporate have been associated.

In a observe printed on Wednesday, Jefferies analyst Jonathan Matuszewski raised his worth goal on Mattress Tub to $9 from $5, citing confidence within the firm’s price reducing measures that embrace job cuts and retailer closings.

That’s the highest worth goal on Mattress Tub’s inventory among the many 16 analysts who cowl it which might be tracked by Refinitiv, with the median worth goal at the moment listed as $3.

On Thursday, Raymond James, one other brokerage, downgraded Mattress Tub to “underperform” from “market carry out.”

“We discover it difficult to even preserve our impartial ranking given the present traits of the enterprise and ongoing money burn,” Raymond James analyst Bobby Griffin wrote in a observe.

Mattress Tub additionally disclosed on Wednesday it had employed Jefferies to promote 12 million shares within the open market. Jefferies is entitled to a fee of as much as 3% of the quantity bought, in keeping with a regulatory submitting.

Jefferies and Mattress Tub representatives didn’t reply to requests for remark. Mattress Tub shares ended buying and selling down 8.6% at $8.71 on Thursday.

Buyers view Mattress Tub as one of many so-called “meme” shares, shares that commerce based on social media hype reasonably than their financial fundamentals. This isn’t the primary time Jefferies analysts have taken a bullish view on a meme inventory that’s out of sync with the remainder of Wall Avenue.

In March 2021, Jefferies analysts raised their worth goal on online game retailer GameStop Corp (NYSE:)’s inventory to $175 from $15, citing the corporate’s pivot to on-line gross sales. The value goal was far increased than the $25 median amongst seven analysts protecting the corporate at time, in keeping with Refinitiv. As with Mattress Tub, Jefferies was dealing with GameStop’s inventory sale program on the time.

GameStop shares traded as excessive as $302.56 in June 2021. They ended buying and selling on Thursday at $27.63, equal to $110.52, accounting for a four-for-one share cut up final July. The final worth goal change from Jefferies on GameStop was in June, earlier than the share cut up, from $90 to $110, Refinitiv information exhibits.

(This story has been refiled to appropriate final paragraph to permit for GameStop inventory cut up)

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