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Herbalife Bull: 'A Very Cheap Stock' Ahead Of Q4 Results

Herbalife Bull: 'A Very Cheap Stock' Ahead Of Q4 Results

Herbalife Ltd. (NYSE: HLF), set to post earnings Thursday, is a "powerfully attractive" stock at its current price, according to a long-time bull.

Pivotal Research's Timothy S. Ramey reiterated a Buy and $75 target on the stock Monday and said the company is "clearly a sensible, ethical business," despite a pending investigation by the Federal Trade Commission.

Ramey has been positive on Herbalife since at least last January, when he issued a bullish note at his former employer, D.A. Davidson.

Herbalife shares are down nearly 49 percent since then, partly from a high-decibel short campaign by Bill Ackman's Pershing Square Capital.

Herbalife closed Monday down 3.7 percent at $34.10.

Related Link: Herbalife Calls Ackman's Comments A 'Tirade'

Ackman has characterized Herbalife's multi-level marketing model as an illegal pyramid scheme.

With about 80 percent of Herbalife's business derived in non-U.S. markets, Ramey said the strengthening dollar makes the company's November guidance for the fourth-quarter earnings of $1.30 to $1.40 a share is "stale."

Analysts on average expect earnings of $1.22 a share, on sales of $1.16 billion.

For 2015, Ramey expects Herbalife sales will fall 3.4 percent on a 2.1 percent increase in volume offset by a 5.5 percent currency headwind.

"Yet the stock remains very cheap," Ramey said, adding that investors with a 12-to-18-month horizon will be "well-rewarded."

Handicapping the risk of the FTC investigation is "very difficult," Ramey said, but he added that an adverse outcome is "unlikely."

Latest Ratings for HLF

Aug 2019UpgradesNeutralBuy
Aug 2019MaintainsBuy
Oct 2018Initiates Coverage OnBuy

View More Analyst Ratings for HLF
View the Latest Analyst Ratings

Posted-In: Pivotal Research Timothy S. RameyAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga


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