Herbalife (NYSE:HLF) Stock Dropped to Hold by Zacks Research

Key Points

• Zacks Research downgraded Herbalife from “strong buy” to “hold,” although the broader analyst consensus remains “Moderate Buy” with a $17.67 price target.
• Herbalife’s stock opened at $13.04, with a $1.37 billion market capitalization, and trades below its 200-day moving average. Its latest quarterly EPS of $0.51 missed estimates, while revenue of $1.33 billion exceeded forecasts and rose 5.4% year over year.
• The company authorized a $250 million share-repurchase plan, allowing it to buy back up to 19.3% of outstanding shares; several institutional investors also increased their holdings.

Herbalife (NYSE:HLF - Get Free Report) was downgraded by stock analysts at Zacks Research from a "strong-buy" rating to a "hold" rating in a research report issued on Thursday, Zacks reports.

A number of other analysts have also commented on HLF. Wall Street Zen raised shares of Herbalife from a "hold" rating to a "buy" rating in a research report on Saturday, October 24th. UBS Group set a $21.00 target price on shares of Herbalife in a research report on Thursday, September 17th. Texas Capital upgraded shares of Herbalife to a "strong-buy" rating in a research note on Thursday, September 17th. Weiss Ratings reissued a "hold (c)" rating on shares of Herbalife in a research report on Thursday, October 22nd. Finally, Citigroup restated a "buy" rating and set a $17.00 price objective (down from $21.00) on shares of Herbalife in a research note on Friday, August 7th. One research analyst has rated the stock with a Strong Buy rating, three have given a Buy rating and four have assigned a Hold rating to the company's stock. According to data from MarketBeat, the company presently has a consensus rating of "Moderate Buy" and a consensus price target of $17.67.

Herbalife Price Performance

HLF stock opened at $13.04 on Thursday. The stock has a market capitalization of $1.37 billion, a P/E ratio of 8.41, a P/E/G ratio of 0.43 and a beta of 0.78. The business has a 50-day moving average of $12.71 and a 200-day moving average of $14.01. Herbalife has a fifty-two week low of $7.56 and a fifty-two week high of $20.40.

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

Herbalife declared that its board has authorized a stock repurchase plan on Tuesday, September 8th that permits the company to repurchase $250 million in shares. This repurchase authorization permits the company to purchase up to 19.3% of its shares through open market purchases. Share repurchase plans are often a sign that the company's leadership believes its shares are undervalued.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently modified their holdings of HLF. Arrowstreet Capital Limited Partnership increased its holdings in shares of Herbalife by 11.5% during the 1st 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 raised 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 valued at $27,638,000 after acquiring an additional 425,968 shares during the period. Pacer Advisors Inc. bought a new stake in Herbalife in the 1st quarter valued at $9,491,000. Bank of New York Mellon Corp acquired a new stake in Herbalife during the 2nd quarter valued at $5,842,000. Finally, Squarepoint Ops LLC lifted its holdings in Herbalife by 39.4% during the 2nd quarter. Squarepoint Ops LLC now owns 428,376 shares of the company's stock valued at $5,633,000 after purchasing an additional 121,026 shares during the last quarter.

About Herbalife

Herbalife Ltd. NYSE: HLF is a global nutrition and wellness company that develops and distributes products through a network of independent members and distributors. Its offerings include meal-replacement shakes, protein and other dietary supplements, vitamins, sports nutrition products, and personal-care items.

Founded in 1980 by Mark Hughes, Herbalife sells its products through direct-selling channels rather than primarily through traditional retail stores. Independent distributors market the products, provide product guidance, and may operate nutrition clubs or similar community-based businesses.

The company serves customers across numerous markets in North America, Latin America, Europe, Asia-Pacific, and other regions.

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