D.A. Davidson & Co. Reiterates Buy on Herbalife Following Pershing Square Investor Letter

In a report published Thursday, D.A. Davidson & Co. analyst Timothy S. Ramey reiterated a Buy rating and $92.00 price target on

. In the report, D.A. Davidson & Co. “According to the October 2, 2013 Pershing Square Investor Letter, Pershing Square has ‘in recent weeks' covered “more than 40%” of the estimated 24.5 million share short position – about 10 million shares. Pershing Square is said to have replaced it with OTC put options that are far out of the money. It is not clear that the counterparty to this short-cover trade is not now itself short, but the very heavy volume on a strong tape (Herbalife made a new all-time high of $74.94 yesterday) would lead us to believe that a substantial amount of the 10 million share cover has occurred. As of September 13th there were still $28.6 million shares sold short. The September 30th numbers will be announced on October 9th after the market close.” Herbalife Ltd. closed on Wednesday at $73.09.