Analysts keep a neutral outlook
Herbalife (HLF) impressed with its performance in the first half of 2018. The company’s sales and volumes returned to growth in China and Mexico, with China marking record volumes. Herbalife’s top line also improved substantially in the United States, which instilled confidence in its stock.
Herbalife’s management raised its full year guidance for worldwide volume point growth, which indicates that the company is likely to sustain its growth momentum in the second half of 2018.
Herbalife is expanding its product portfolio and entering new product categories. The company has accelerated the pace of its new product launches, which is expected to support its volume growth. Improving market conditions and a focus on its product portfolio are expected to drive the company’s sales in the coming quarters.
Herbalife’s bottom line is also expected to mark healthy YoY (year-over-year) growth on the back of strong sales and a lower tax rate. However, unfavorable currency rates are expected to hurt its sales and earnings growth rate in 2018.
Ratings and target price
Among the analysts covering Herbalife, 60.0% have “hold” recommendations, and 40.0% have “buy” recommendations on the stock. Analysts have a consensus target price of $61.10 per share on Herbalife stock, which implies an upside potential of 19.6%.
Alongside Herbalife, analysts maintain a neutral outlook on other nutritional and dietary supplement product makers, including Usana Health Sciences (USNA), the Vitamin Shoppe (VSI), and Nu Skin Enterprises (NUS).