In addition, analyst Steven Strycula believes consensus FY17 sales and EPS estimates for Hain remain too high and see downside risk on the same.
Further, Strycula trimmed his below-consensus FY17 EPS view to $1.95 from $2.05 versus Street at $2.15 based on +4 percent global organic sales (incl. +3 percent U.S).
The analyst, who maintains his Sell rating on the stock, attributed the downward revision to slower U.S. scanner data trends, falling non-measured U.S. grocery SSS trends, currency headwinds and SKU rationalization.
On the valuation front, Strycula's base case assumes no immediate audit clarity and values Hain using trailing 12-month FCF/share ($1.65) in place of adjusted EPS $1.97.
"Our $33 target is based on 20x Hain's trailing 12m FCF/share of $1.65 — which implies a 5 percent FCF yield (in line w/food peers)," Strycula added.
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