Will Analysts Change Their Rating on Herbalife Stock?



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.

Article continues below advertisement

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.


More From Market Realist