UPDATE: Bank of America Downgrades Avon Products to Neutral, Lowers PT as Turnaround will Take Longer than Expected

In a report published Wednesday, Bank of America analyst Olivia Tong downgraded the rating on

from Buy to Neutral, and lowered the price target from $22.50 to $18.50. In the report, Bank of America noted, “While we continue to believe that Avon is fixable and that growth prospects are better than HPC average over the long-term, we are downgrading shares of Avon Products to Neutral from Buy as we believe the turnaround will take longer than originally expected. Moreover, given projected USD strength in 2014 and the likelihood of another VZ devaluation (5% of profit), AVP is likely to face additional FX headwinds. Growth in AVP's largest market, Brazil, was better than we expected last quarter, but comps are getting tougher. Meanwhile, results in several other markets are worsening, most notably North America, and visibility into near-term growth for the company is lacking. Valuation is undemanding at 15.5x our CY14 EPS estimate, but until we see more clarity on how and when growth stabilizes, we expect shares to be range-bound. A resolution to the ongoing FCPA case and/or a broader restructuring program in North America could change that.” Avon Products closed on Tuesday at $16.92.