Wall Street Zen Upgrades Herbalife (NYSE:HLF) to Buy

Key Points

• Wall Street Zen upgraded Herbalife from “hold” to “buy,” although the broader analyst consensus remains “Hold,” with three Buy ratings and four Hold ratings and an average target price of $17.67.
• Herbalife’s shares opened at $11.89, while the company’s latest quarter showed revenue rising 5.4% year over year to $1.33 billion; however, earnings of $0.51 per share missed estimates of $0.54.
• The board approved a $250 million share buyback, authorizing repurchases of up to 19.3% of outstanding shares, which may signal management believes the stock is undervalued.

Herbalife (NYSE:HLF - Get Free Report) was upgraded by analysts at Wall Street Zen from a "hold" rating to a "buy" rating in a research report issued to clients and investors on Saturday, Wall Street Zen reports.

HLF has been the subject of a number of other research reports. Weiss Ratings cut shares of Herbalife from a "hold (c+)" rating to a "hold (c)" rating in a research report on Friday, July 24th. Citigroup reaffirmed a "buy" rating and set a $17.00 price target (down from $21.00) on shares of Herbalife in a research report on Friday, August 7th. Finally, UBS Group set a $21.00 price objective on shares of Herbalife in a research note on Thursday. Three research analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the company's stock. According to data from MarketBeat.com, the stock currently has an average rating of "Hold" and a consensus target price of $17.67.

Herbalife Stock Up 1.8%

Shares of NYSE:HLF opened at $11.89 on Friday. Herbalife has a 12-month low of $7.56 and a 12-month high of $20.40. The business has a 50 day moving average of $12.21 and a 200-day moving average of $13.42. The stock has a market cap of $1.25 billion, a PE ratio of 7.67, a P/E/G ratio of 0.39 and a beta of 0.85.

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

Herbalife declared that its board has approved a share buyback program on Tuesday, September 8th that authorizes the company to buyback $250.00 million in outstanding 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 board of directors believes its shares are undervalued.

Institutional Trading of Herbalife

A number of institutional investors have recently modified their holdings of HLF. Pacer Advisors Inc. bought a new position in shares of Herbalife in the 1st quarter valued at $9,491,000. Bank of New York Mellon Corp acquired a new stake in Herbalife in the second quarter valued at about $5,842,000. Dimensional Fund Advisors LP boosted its stake in Herbalife by 29.3% in the first quarter. Dimensional Fund Advisors LP now owns 1,877,717 shares of the company's stock valued at $27,638,000 after buying an additional 425,968 shares in the last quarter. Johnson Financial Group LLC boosted its stake in Herbalife by 1,156.1% in the fourth quarter. Johnson Financial Group LLC now owns 414,500 shares of the company's stock valued at $5,343,000 after buying an additional 381,500 shares in the last quarter. Finally, Invenomic Capital Management LP grew its position in Herbalife by 82.6% in the fourth quarter. Invenomic Capital Management LP now owns 768,031 shares of the company's stock valued at $9,900,000 after acquiring an additional 347,401 shares during the last quarter.

Herbalife Company Profile

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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