2 minutes reading time (370 words)

Citi predicts a big rally for Herbalife now that risk of Ackman bashing is over

102561718-159251862.530x298

Source: 

  • Citi Research raises its rating to buy from neutral for Herbalife shares, citing the company's attractive valuation versus the market.
  • We "expect Ackman's exit may mean that some investors give Herbalife a new look as headline risk has dissipated, we contend that Herbalife should trade at a 10% premium to the market," the firm says in a note.
  • Pershing Square's Bill Ackman told CNBC on Feb. 28 he exited his losing bet against Herbalife, five years after his on-air verbal brawl with Carl Icahn over the company.

Herbalife shares will rise because investors can now focus on the nutritional supplement maker's growth prospects rather than on negative headlines, according to one Wall Street firm.

Pershing Square's Bill Ackman told CNBC on Feb. 28 he exited his losing bet against Herbalife, five years after his on-air verbal brawl with Carl Icahn over the company. Icahn said the following day he made a billion dollar paper profit on his investment in the company.

Citi Research raised its rating to buy from neutral for Herbalife shares, citing the company's attractive valuation versus the market.

 

"Even with the rise in the stock, we see upside as Herbalife executes a tender offer and refinances its debt, to both reinvest in the business and repurchase shares in 2019," analyst Beth Kite wrote in a note to clients Monday. We "expect Ackman's exit may mean that some investors give Herbalife a new look as headline risk has dissipated, we contend that Herbalife should trade at a 10% premium to the market."

The company's stock is up 39 percent this year through Monday. Herbalife shares rose 2.5 percent Tuesday.

Kite increased her price target for Herbalife shares to $114 from $85, representing 21 percent upside to Monday's close.

Herbalife currently trades at a 9 percent price-to-earnings multiple discount to the S&P 500, according to the analyst's estimates. Kite said the company traded at an 8 percent premium to the market in 2010 and 2011 before Ackman publicized his bearish position.

"From a fundamental point of view, if Herbalife can deliver its local currency sales growth guidance in 2018, it would be one of the best top line stories in HPC [Household/Personal Care Products]," she wrote.

— CNBC's Michael Bloom contributed to this story.

Herbalife Nutrition Clubs
Herbalife Family Foundation Raises $1.8 Million to...

Related Posts

 

Comments

No comments made yet. Be the first to submit a comment
Already Registered? Login Here
Guest
Wednesday, 21 August 2019
This website is protected by RSFirewall!, the firewall solution for Joomla!

front1

AccessJamaica

Wait a minute, while we are rendering the calendar
Guest
16 August 2016
Medical Marijuana
Wellness News
Cannabis and Jamaica: A True Business Opportunity!CanEx Jamaica – Cannabis Business Conference and ExpoUnlocking the Business OpportunitiesFriday September 2, 2016 The legal cannabis industry rep...
Theo Chambers
02 April 2018
Wellness News
This is how people find support in their communities to help them achieve their goals.Herbalife Nutrition Clubs are at the heart of how Herbalife helps people change their lives and their communi...
Guest
31 January 2017
Wellness News
    Source:Hope Heaven    The very thought of taking a piece about my raw foods journey and entitling it, “pitted sun dried oil cured black olives,” makes me chuckle. You see,...
Sharon Parris-Chambers
08 January 2017
Medical Marijuana
Wellness News
The Washington Post - By Marie Myung-Ok Lee January 6It took me awhile to perfect the cookie recipe. I experimented with ingredients: Blueberry, Strawberry, Sour Diesel, White Widow, Bu...
Guest
07 August 2017
Nutrition
Wellness News
By Carina Storrs, Special to CNN(CNN)Who doesn't love chocolate? Even if it's not your favorite sweet treat, you can probably agree that the confection conjures thoughts of love, pleasure, and reward....
Sharon Parris-Chambers
06 February 2017
Wellness News
SOURCE: healthy-holistic-living.comPhoto Caption: Brazil About to Refuse ALL Imports of U.S.- Grown Genetically-Modified CropsBrazil — The list of countries refusing Monsanto’s genetica...
Guest
27 August 2017
Wellness News
By Sandee LaMotte, CNNcinnamon is one of the world's most popular spices, sprinkled on lattes, boiled with ciders and enjoyed in numerous dishes. Without it, Thanksgiving and Christmas meals might wel...
Sharon Parris-Chambers
22 November 2016
Allergies
Wellness News
Better go check your fridge: Sabra, one of America’s most ubiquitous brands of hummus, is recalling dozens of products due to a listeria scare. The recall includes 57 varieties, or the vast majority o...