Herbalife Still Loved At Barclays After China Visit

• Herbalife Ltd. (NYSE: HLF) shares have surged 43 percent year-to-date, from a low of around $30 in early-March.
• Barclays’ Meredith Adler maintained an Overweight rating for the company, with a price target of $73.
• A visit to China revealed that the company appears poised to continue a healthy pace of growth, despite China’s current economic problems.

Analyst Meredith Adler said that a meeting with the senior management team of Herbalife in China and talks with nutrition club members had indicated that the company was less impacted by the country’s economic issues than other multi-level marketing firms.

“We see the company being able to continue growing its business in China at a healthy pace,” Adler wrote. The existing forecasts of 32 percent for the local currency growth rate in China in 3Q15 and 25 percent in both 4Q15 and FY16 remained unchanged post visit.

Adler enumerated the key takeaways from the visit as follows:

• Herbalife has an experienced management team
• The business has a high focus on serving customers. With the help of nutrition clubs, the company was supporting the desire of customers to better their health through improved nutrition and increased activity.
• Attracting and retaining members gaining importance over the recruitment of new sales representatives.
• The management expressed confidence that there are still ample opportunities to open nutrition clubs throughout the country.
• The consumers, Herbalife’s sales reps and nutrition clubs are all driven by the desire to deal the growing obesity problem
• ”A focus on encouraging physical activity to support weight loss through the sponsorship of 5K runs and fitness camps.”