UPDATE: D.A. Davidson Downgrades Nu Skin Enterprises to Neutral as Shares Close on Target

In a report published Friday, D.A. Davidson analyst Tim Ramey downgraded the rating on Nu Skin Enterprises NUS from Buy to Neutral. In the report, D.A. Davidson noted, “We are reducing our rating on Nu Skin to NEUTRAL, previously Buy. Our Buy rating dates back to May 3rd 2006 with the stock at $14.75. The shares now trade at 16.6x our 2014 estimate of $5.60, arguably still cheap for a company that has compounded growth in EPS at a 22% rate since our Buy rating was initiated just over seven years ago. The shares are up 535% during this term and up 152% year-to-date. Even so, we are reminded that the valuation of MLMs does not yet correspond, fully, to their growth rates. If this was not an MLM we would have a 25x EPS target equal to $130. We are mindful that the company is days away from entering a 4-week period where it may sell north of $500 million of weight loss kits in its LTO (limited-time-offering). We have no reason to believe that this will not be a spectacular success. Having said that, much of the movement in the stock since the Q2 report on August 1st must be thought of as discounting this event.” Nu Skin Enterprises closed on Thursday at $93.33.