Tempur-Pedic shares slip to all-time low

The stock lost 37 cents, or 4.4 percent, to $8.13 after falling as low as $8.08 earlier in the session.

John Baugh said he expects economic conditions to deteriorate for the rest of the year and cut his 2008 and 2009 earnings estimates on the Lexington, Ky., company.

He trimmed his price target to $17 from $20, implying he still expects shares to more than double in value.

Baugh maintained his "Buy" rating, calling the stock "grossly undervalued" and said he does not expect the company to default on its debts despite the challenges.