UPDATE: Goldman Sachs Downgrades GNC, Removes from Americas Buy List

In a report published Friday, Goldman Sachs analyst Stephen Tanal downgraded GNC (NYSE: GNC) from Buy to Neutral and lowered the price target from $72.00 to $54.00. Goldman Sachs also removed GNC Holdings from Americas Buy List.

Tanal noted that his Buy rating was based on the acceleration of SSS growth to a peak in Q2, margin improvement from the Gold Card launch, and a "promising" capital allocation program. The analyst commented that SSS acceleration and margin improvement are now unlikely in his revised thesis.

Goldman Sachs revised earnings growth to fall below the fourth quarter pace throughout 2014. Stephen Tanal wrote, "GNC plans to distribute more free memberships than we expected. This approach should aid the member renewal rate, but we no longer expect SSS growth to beat guidance, and now see a more moderate 2Q outcome, followed by deceleration in 2H14, which we had expected would occur as the company cycled the nationwide launch of the new Gold Card program. We see this cadence as less supportive of multiple expansion."

Shares of GNC Holdings closed at $52.39 on Thursday. GNC was down 14.11% in pre-market trading and is currently down 10.75% at $46.76.