Despite Headline Risk & FTC Investigation, Herbalife's U.S. Biz Momo Should Continue, Wedbush Says

Bullish comments from Wedbush are not helping Herbalife (NYSE: HLF) as the stock continues to slide after announcing that the company received a civil investigation demand from the Federal Trade Commission last Wednesday. Shares are down 0.26 percent to $53.32. Channel checks indicate “strong momentum in the U.S. business, driven by solid recruiting trends and a successful new product launch,” said analyst Rommel Dionisio.The FTC investigation does not seem to be slowing distributor recruiting in the U.S.; after conversations with senior level sales leaders, Dionisio believes “the region continues to generate high single-digit growth momentum in total Sales Leaders and Members.”Herbalife's new product “SKIN” offers “meaningfully higher gross margin than the core Formula 1 diet shake line,” said the analyst.Dionisio reiterated his $90 price target and Outperform rating on the stock.