Shawshank, VA 3/11/12 (StreetBeat) -- Shares of Mattress Firm Holding Corp. (Nasdaq: MFRM) climbed to a new high Wednesday, a day after the company posted a fourth-quarter profit, gave a full-year outlook above analysts' expectations and announced a deal to buy Mattress Giant for $47 million.THE SPARK: On Tuesday, Mattress Firm, which went public in November, reported that it earned 56 cents per share in the fourth quarter. The Houston company lost money in last year's fourth quarter.
Mattress Firm also announced that it expects full-year earnings of $1.40 to $1.48 per share on revenue of $1.03 billion to $1.06 billion. Analysts polled by FactSet predict earnings of $1.36 per share on revenue of $880 million.
Mattress Firm anticipates that its acquisition of Mattress Giant will close during the fiscal second quarter ending July 31.
THE ANALYSIS: Bradley Thomas of KeyBanc Capital Markets said in a client note that the Mattress Giant deal should add to Matrress Firm's earnings in 2013 and strengthen its position in several key markets.
The analyst raised Mattress Firm's price target to $56 from $44 and maintained a "Buy" rating. He said that the company remains one of his top picks for 2012.
SHARE ACTION: Mattress Firm's stock gained $4.32, or 11.5 percent, to $41.75 in morning trading. The stock went as high as $44.83 earlier in the session, which is more than double the $22 that the stock opened at in its first day of trading on Nov. 18.
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