UPDATE: Canaccord Genuity Lowers Nu Skin Rating, Stock Plummets 21% Upon Operation Probe in China
In a report released Thursday morning, Scott Van Winkle of Canaccord Genuity lowers Nu Skin Enterprises (NYSE: NUS) from Buy to Hold, lowering price target from $140 to $104.
The People's Daily, a worldwide distributed Chinese publication, made allegations in Wednesday's edition about Nu Skin's operation claiming that it is a "susptected illegal pyrimid scheme." The market has since reacted negatively to this news.
The analyst notes, "Based on news reports this morning, local Chinese government will investigate NUS' activities in China. While we have confidence in NUS' China direct selling operations, particularly given its continued achievement of new provincial licenses, we don't have any confidence that we could predict the Chinese government, even in light of a relatively straightforward direct selling law in mainland China."
NUS is currently trading down 21.4% at the $90.62 mark.
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