Herbalife Downgraded by DA Davidson to Neutral (HLF)

Herbalife (NYSE: HLF) was downgraded by research analysts at DA Davidson to a “neutral” rating in a report released on Tuesday, AnalystRatingsNetwork.com reports.

The analysts wrote, “In light of today’s announcement that Herbalife’s former auditor KPMG has resigned and withdrawn its audit reports on Herbalife’s financial statements for 2010, 2011 and 2012, we are downgrading the shares to NEUTRAL from Buy and lowering our price target to $38, previously $78. Our price target is 8x our FY13 estimate $4.75. There is no reason to feel differently about Herbalife, its prospects, its historic performance, or our outlook. Our EPS estimates are unchanged. Yet as a stock, it will be a serious problem to be out of compliance (through no fault of their own) with NYSE requirements; and potentially breach their loan covenants. We are reducing our long-term target to $90, previously $180 which encapsulates our view that there is heightened risk and volatility near-term, but excellent value in the longer term.”

Shares of Herbalife (NYSE: HLF) traded down 3.62% during mid-day trading on Tuesday, hitting $37.00. Herbalife has a one year low of $24.24 and a one year high of $73.00. The stock’s 50-day moving average is currently $38.61. The company has a market cap of $3.814 billion and a P/E ratio of 9.48.

Herbalife (NYSE: HLF) last announced its earnings results on Tuesday, February 19th. The company reported $1.05 EPS for the quarter, beating the Thomson Reuters consensus estimate of $1.01 by $0.04. The company had revenue of $1.06 billion for the quarter, compared to the consensus estimate of $1.05 billion. During the same quarter last year, the company posted $0.86 earnings per share. Herbalife’s revenue was up 19.8% compared to the same quarter last year. Herbalife has set its Q guidance at $1.03-1.07 EPS and its FY13 guidance at $4.45-4.65 EPS. On average, analysts predict that Herbalife will post $4.69 earnings per share for the current fiscal year.

Other equities research analysts have also recently issued reports about the stock. Analysts at TheStreet reiterated a “buy” rating on shares of Herbalife in a research note to investors on Monday.

Three research analysts have rated the stock with a hold rating and eight have assigned a buy rating to the company. The company has a consensus rating of “Buy” and an average price target of $66.80.

Herbalife Ltd. is a global network marketing company that sells weight management, nutritional supplements, energy, sports and fitness products and personal care products through a network of approximately 2.

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