Argus Sees Long-Term Health In Herbalife Shares

In Argus' morning summary, analyst John Staszak‏ maintained a Hold rating on Herbalife HLF following the April announcement that the Department of Justice ad FBI are investigating the company. The analyst raised estimates following first quarter results, but noted "limited near-term upside" given investigations. Staszak wrote, “Despite HLF's recent solid results and favorable valuation metrics, we believe that the shares have limited nearterm upside due to the current investigations of the company by the FTC and the DOJ.” Argus raised 2014 EPS estimate from $6.05 to $6.36, above the consensus estimate of $6.24. 2015 EPS estimate was also increased from $7.10 to $7.45, above the consensus of $7.20. The analyst expects revenue to increase 11 percent in 2014 to $5.3 billion, with a five-year growth rate forecast of 18 percent. Argus reaffirmed its five-year Buy rating on the company due to Herbalife's strong balance sheet and earnings growth potential. Shares of Herbalife closed at $64.54 on Friday. The stock is currently trading at $63.54, down 1.57 percent.