Wedbush Defends Herbalife, Says Jan. 10th Meeting Could Be Positive Catalyst
Wedbush analyst Rommel Dionisio Friday said he believes Herbalife (NYSE: HLF) will ease investor concerns during its call on January 10th by disclosing more information on internal consumption rates, SG&A expenses, and past FTC rulings.
The controversy surrounding Herbalife points to its business model resembling that of a pyramid scheme, namely that more of its revenue comes from recruiting new distributors than from actual sales. Wedbush's analysis proposes this notion is incorrect and that retail profits are actually greater than the recruiting commissions.
Wedbush said negative publicity won't have a “noticeable” impact on Herbalife's future performance and recruitment and sales should remain strong.
Wedbush maintains an Outperform rating on Herbalife shares but slashed the price target from $82 to $54.
Herbalife's Analyst and Investor Meeting is scheduled for January 10th, 2013 at 9:00am EST.
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