Pivotal Research Group Slashes Herbalife Price Target Following Earnings

Herbalife Ltd. HLF announced third quarter financial results Tuesday, with EPS of $1.45 per share versus $1.51 per share estimates.

Revenue also missed expectations by 4.55 percent, or $60 million.

Following the downbeat results, analysts at Pivotal Research Group cut the target price on Herbalife from $110 to $75, but remain with a Buy rating.

Timothy Ramey finds the company missed on key metrics and offered weaker-than-expected guidance, consequently "We see the valuation of Herbalife as less attractive than it was before the 3Q – but still quite compelling."

Ramey highlights that distributor counts were weaker than expected, which brings into question future growth.

“We value HLF on a P/E basis with a “tainted” valuation of 13.3x 2015 EPS a low value for a company that has consistently grown top-line and EPS in double-digit rates, but perhaps reasonable for the no-growth outlook for 2015.”

Shares of Herbalife recently traded at $44.63, down 20 percent.