UPDATE: Deutsche Bank Initiates Coverage on Vitamin Shoppe on Multiple Positive Factors

In a report published Thursday, Deutsche Bank analyst Karen Short initiated coverage on

with a Buy rating and $52.00 price target. In the report, Deutsche Bank “VSI has experienced some challenges this year – including headwinds from Super Supplements and the new DC. As a result, lease-adjusted ROIC has declined slightly and valuation has contracted. While we see the lumpiness persisting through FY13, we believe the current level presents investors with an attractive entry point for the following reasons: 1) ROIC should begin to improve once VSI cycles both the new DC costs and acquisition integration costs, 2) with ROIC improving, we expect the valuation multiple to expand, 3) we believe VSI will continue to gain share in the high-growth health supplements space, so we believe the long-term growth story is intact.” Vitamin Shoppe closed on Wednesday at $42.09.