Growth In China Believed To Be The Driver Behind Nu Skin Enterprise's New Guidance

Jefferies raised its estimates and price target on Nu Skin Enterprises, Inc. NUS after the company said its third quarter revenue should be at or above the high end of guidance of $560-$580 million on China growth.

The company made a similar statement in June regarding its second quarter revenue. Subsequently, the company's second quarter results came in +3 percent above the high end of guidance/consensus.

As such, Jefferies raised its third quarter revenue estimate to $585 million from $576 million, resulting in an incremental $0.02 in EPS.

"We remain uncertain as to the cadence of repurchases throughout 2H, however, and we think this could be a meaningful swing factor for EPS," analyst Trevor Young wrote in a note.

"We estimate that if no repurchases happened during the quarter, our EPS estimate would be $0.80, in-line with the low-end of guidance, and that every $30m in repurchases (or ~500k shares) results in a $0.01 change in EPS," Young continued.

Meanwhile, Nu Skin had reached a resolution with the SEC over a previously disclosed investigation into its record keeping and internal controls related to a charitable contribution in China in 2013. NUS will pay a $766,000 fine, and as part of the settlement, neither admitted nor denied the SEC's findings.

"The fine is negligible, in our view, but more importantly this resolution, along with Herbalife's FTC settlement earlier this summer, likely alleviate some investors' concerns over the business practices of direct sellers," Young added.

Young, who has a Hold rating on the stock, also raised his price target to $61 from $53.

At time of writing, shares of Nu Skin rose 3.03 percent to $64.17 after reaching a new 52-week high of $64.48.