Herbalife (NYSE:HLF) Downgraded by Wall Street Zen to "Hold"

Key Points

• Wall Street Zen downgraded Herbalife from “Buy” to “Hold.” Despite the change, analysts collectively maintain a “Moderate Buy” consensus with an average price target of $17.67.
• Herbalife shares opened at $12.57, while the company’s latest quarterly results showed revenue of $1.33 billion—above expectations—but earnings per share of $0.51 missed the $0.54 consensus estimate.
• The board authorized a $250 million stock-repurchase program, allowing Herbalife to buy back up to 19.3% of its outstanding shares, and several hedge funds recently increased their positions.

Herbalife (NYSE:HLF - Get Free Report) was downgraded by equities research analysts at Wall Street Zen from a "buy" rating to a "hold" rating in a report released on Sunday, Wall Street Zen reports.

Several other research analysts have also recently weighed in on the company. UBS Group set a $21.00 price target on Herbalife in a research report on Thursday, September 17th. Weiss Ratings cut shares of Herbalife from a "hold (c+)" rating to a "hold (c)" rating in a research note on Friday, July 24th. Citigroup reaffirmed a "buy" rating and set a $17.00 target price (down from $21.00) on shares of Herbalife in a report on Friday, August 7th. Finally, Texas Capital raised shares of Herbalife to a "strong-buy" rating in a report on Thursday, September 17th. One equities research analyst has rated the stock with a Strong Buy rating, three have assigned a Buy rating and four have assigned a Hold rating to the company. According to MarketBeat, Herbalife currently has an average rating of "Moderate Buy" and an average price target of $17.67.

Herbalife Trading Up 2.9%

Shares of HLF opened at $12.57 on Friday. The company has a market capitalization of $1.32 billion, a PE ratio of 8.11, a price-to-earnings-growth ratio of 0.42 and a beta of 0.85. The business's 50 day moving average is $12.19 and its 200 day moving average is $13.25. Herbalife has a 12-month low of $7.56 and a 12-month high of $20.40.

Herbalife (NYSE:HLF - Get Free Report) last posted its quarterly earnings results on Thursday, August 6th. The company reported $0.51 EPS for the quarter, missing the consensus estimate of $0.54 by ($0.03). The business had revenue of $1.33 billion during the quarter, compared to analysts' expectations of $1.31 billion. Herbalife had a net margin of 3.16% and a negative return on equity of 43.90%. Herbalife's revenue for the quarter was up 5.4% compared to the same quarter last year. During the same period in the previous year, the company posted $0.59 earnings per share. Equities research analysts predict that Herbalife will post 2.68 earnings per share for the current year.

Herbalife declared that its board has authorized a stock repurchase program on Tuesday, September 8th that authorizes the company to buyback $250.00 million in shares. This buyback authorization authorizes the company to reacquire up to 19.3% of its stock through open market purchases. Stock buyback programs are often an indication that the company's leadership believes its shares are undervalued.

Hedge Funds Weigh In On Herbalife

Hedge funds have recently made changes to their positions in the company. Arrowstreet Capital Limited Partnership boosted its stake in shares of Herbalife by 11.5% in the first quarter. Arrowstreet Capital Limited Partnership now owns 2,596,795 shares of the company's stock worth $38,225,000 after acquiring an additional 267,539 shares during the last quarter. Dimensional Fund Advisors LP lifted its stake in Herbalife by 29.3% in the 1st quarter. Dimensional Fund Advisors LP now owns 1,877,717 shares of the company's stock worth $27,638,000 after purchasing an additional 425,968 shares in the last quarter. Invenomic Capital Management LP lifted its stake in Herbalife by 82.6% in the 4th quarter. Invenomic Capital Management LP now owns 768,031 shares of the company's stock worth $9,900,000 after purchasing an additional 347,401 shares in the last quarter. Pacer Advisors Inc. acquired a new position in shares of Herbalife during the 1st quarter worth approximately $9,491,000. Finally, Bank of New York Mellon Corp purchased a new stake in shares of Herbalife in the second quarter valued at approximately $5,842,000.

About Herbalife

Herbalife Ltd. NYSE: HLF is a global nutrition and wellness company that develops and sells products through a network of independent distributors. Its offerings are designed to support weight management, balanced nutrition, energy, sports performance and personal care.

The company's product portfolio includes meal-replacement shakes, protein and fiber products, dietary supplements, vitamins, herbal teas, sports nutrition products and skin- and body-care items. Herbalife distributes its products in markets around the world, including North America, Latin America, Europe, Asia-Pacific and Africa, primarily through direct selling and independent members who provide product information and personalized support to consumers.

Herbalife was founded in 1980 by Mark Hughes and has since expanded from a primarily weight-management business into a broader nutrition and wellness enterprise.

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