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Will Analysts Change Their Rating on Herbalife Stock?

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Ratings and target price 

Most of the analysts covering Herbalife (HLF) are neutral on the stock. However, this could change following the company’s better-than-expected 1Q17 results and upbeat guidance. Herbalife stock is rated as 2.4 on a scale of 1.0 (strong buy) to 5.0 (strong sell). About 40% of the analysts covering Herbalife stock recommended a “buy” and ~60% recommended a “hold.”

On May 4, 2017, Herbalife was trading at $62.20—19.4% upside to analysts’ 12-month price target of $74.25 per share.

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Peer comparisons

Of the seven analysts rating Nu Skin Enterprises (NUS), 42% recommended a “buy” for the stock, 29% recommended a “hold,” and 29% recommended a “sell.” For The Vitamin Shoppe (VSI), 20% rated the stock a “buy,” 50% rated it a “hold,” and 30% rated it a “sell.” For GNC Holdings (GNC), 20% of the analysts recommended a “buy,” 50% recommended a “hold,” and 30% recommended a “sell.”

Valuation summary

On May 4, 2017, Herbalife was trading at a 12-month forward PE (price-to-earnings) ratio of 13.2x—down from its earlier forward PE multiple of 15.2x. Currently, Herbalife is trading at a lower valuation multiple than the S&P 500 Index’s (SPX) forward PE ratio of 18.7x.

In comparison, Herbalife’s rivals Nu Skin Enterprises and Usana Health Sciences are trading at forward PE ratios of 16.9x and 14.0x, respectively.

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