Managers of Sleep Quarters at Clark's Pond in South Portland, relax on one of their Tempur-Pedic beds.

Bedding manufacturer Tempur Sealy's stock should rally 30 percent over the next year given reduced competition and the possibility of a new partnership with a major retailer, according to KeyBanc Capital Markets.

The closure of roughly 1,000 Mattress Firm locations should add 48 cents to Tempur Sealy's earnings per share, according to analyst Bradley Thomas, who underscored easier competition for the mattress maker over the next 12 months.

The analyst upgraded his rating on the stock to overweight and set a $75 price target.

"We believe Mattress Firm will close 1,000 to 1,500 stores, which we expect to drive market share to Tempur Sealy," Thomas said in a note to clients Wednesday. "Don't sleep on this opportunity."

Mattress Firm, the largest U.S. mattress retailer, is considering a bankruptcy filing as it troubleshoots ways to ditch costly store leases and shutter some of its 3,000 locations, Reuters reported earlier this month.

A sale of Mattress Firm could be a positive for Tempur Sealy, which could rekindle its lucrative partnership with the retailer. Thomas estimates Tempur Sealy could see a boost of up to $500 million for sales and $2.50 for earnings per share should the two companies revive the relationship.

"A sale of Mattress Firm (via prepackaged bankruptcy) makes sense after Labor Day, a major sales and cash flow event," the analyst said. "The business has an opportunity to improve EBITDA via store closures and sales transfer (in a bankruptcy restructuring), and then benefit from bringing Tempur Sealy back to the floor."

The two companies split in 2017 after corporate leadership could not agree on business strategy. The divorce represented a blow to both companies, with Tempur Sealy losing its largest customer and Mattress Firm losing the premium bedding business it generated with Tempur-Pedic.

At the time the termination was announced, shares of Tempur Sealy fell 28 percent and are down about 10 percent since. Shares rose 1.5 percent Thursday following the KeyBanc note.