Canaccord Lowers Price Target On Nu Skin Enterprises

Canaccord lowered its price target on Nu Skin Enterprises, Inc. NUS from $53 to $45 on Thursday and maintained a Hold rating. The change comes after the company lowered its forecast for Q4.

Analyst Scott Van Winkle believed “a stabilization and month-over-month growth in China are necessary before the shares can be bought, despite the heavily discounted valuation.”

Van Winkle commented that the “Q4 guidance is an expectation reset that reflects China, and currency of course. We now view 2015 guidance at the December analyst day as an obstacle.”

“The China revenue performance is modestly better than the distributor trends, and ultimately we expect the 2 metrics to illustrate higher correlation. Greater China sales leaders and active distributors declined 5 percent and 7 percent, respectively.

“We await improvements in both the distributor count and productivity levels before becoming more confident in the China outlook, but commentary supports the early stages of accelerated new sales executive qualification,” according to Van Winkle.

The analyst report noted that outside of “Greater China, the core business is proving resilient QoQ despite the lack of a new product catalyst.”

The report concluded by adjusting F2014 revenue and EPS estimates to “$2.57B/$4.03 from $2.6B/$4.11 on the reduced Q4 outlook. F2015 reduced to $2.64B/$3.95 from $2.83B/$4.60.”

Nu Skin Enterprises recently traded at $40.44, down 7.5 percent.