Target price reduced
After Hain Celestial’s (HAIN) announcement on August 15 regarding the delay in its results, many firms updated their ratings and recommendations for the stock. The recommendations have changed. Among the analysts surveyed by Bloomberg, more analysts favor a “hold” rating now.
Around 36% of analysts rate the stock a “buy,” 46% rate it a “hold,” and 18% rate it a “sell.” Since our pre-earnings series, the average broker target price for Hain Celestial has been reduced 14% to $45.8 from $53.14. This is still 16% higher than the closing price of $39.35 on August 16.
The following are the target prices and return potential for Hain Celestial’s peers as of August 16:
- ConAgra Foods (CAG) has a target price of $51.41 and a return potential of 12%.
- General Mills (GIS) has a target price of $69. It beat estimates by 2% as of August 16.
The PowerShares Dynamic Food & Beverage Portfolio (PBJ) invests 2.7% of its holdings in ConAgra. The Vanguard S&P Mid-Cap 400 Growth ETF (IVOG) and the iShares Morningstar Mid Growth ETF (JKH) invest in Hain Celestial.
Analysts downgraded Hain Celestial
Andrew Lazar from Barclays downgraded the stock to “equal-weight” from “overweight” with a view that “there is no guarantee that the outcome of the review will be materially unfavorable, and it could simply reflect timing.” He also reduced the target price for Hain Celestial from $51 to $43. This is 9% higher than the closing price on August 16.
J.P. Morgan reduced the target price on the stock to $43 from $49—consistent with its “overweight” rating. The firm said that “We are not downgrading – we still see value in the longer-term prospects – but there is no doubt that the story has changed and become far more unclear and less attractive than it used to be, at least until the current situations are resolved.”
Piper Jaffray downgraded the stock to “sell” citing “internal financial control risk make the stock difficult to own.” The firm gave a target price of $35. SunTrust Robinson Humphrey downgraded the stock to “hold” from a “strong buy” and reduced the target price to $40 from $50. Rupesh Parikh at Oppenheimer reduced the target price to $45 from $52. He stated that “If you look at Hain, the stock is down significantly today. I think a lot of it is due to the run on the M&A speculations. If you look at the food retailer environment now, the area that the food suppliers need to do better on is on the fresh side of the business.”
Analyst Akshay Jagdale from Jefferies kept his “buy” rating on the stock. He referred to the drop in the stock price as “a potential buying opportunity.” However, the target price was reduced to $50 from $57. Earlier, Bernstein rated the stock a “strong buy” with a target price of $58. It suspended coverage until the accounting issues are resolved.
Terpolili downgraded the stock’s rating to “neutral” from “outperform.” Piper Jaffray analyst Sean Naughton downgraded the stock to “underweight” from “neutral” with a view that “internal financial control risks make the stock difficult to own.”