Caris Downgrades Herbalife (HLF), Sees Einhorn Announcing Stock as Next Short
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Price: $8.84 +2.91%
Rating Summary:
8 Buy, 5 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
Rating Summary:
8 Buy, 5 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
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Caris & Co.'s Linda Bolton Weiser downgraded shares of Herbalife (NYSE: HLF) from Buy to Average Wednesday morning. Her price target was slashed sharply from $86 to just $39.
The Caris analyst based her call on a greater than 50 percent probability that famed short seller David Einhorn will announce Herbalife as a short at the Ira Sohn conference on May 16th. If this does play out, Bolton Weiser believes Herbalife execs will need to take "decisive action" in order to boost shareholder confidence, specifically suggesting to lever up, add to buybacks and make a "major increases" in the dividend payment.
Bolton Weiser noted Herbalife's management could be "impotent" in a drawn out battle against Einhorn as the company is incorporated in the Cayman Islands, and cannot have negative shareholder equity.
If Einhorn does not present on Herbalife at next week's conference, the Caris analyst said the stock could "jump sharply and we may raise our rating and price target."
Herbalife shares are down 2.3 percent to $44.50 Wednesday morning.
For an analyst ratings summary and ratings history on Herbalife click here. For more ratings news on Herbalife click here.
The Caris analyst based her call on a greater than 50 percent probability that famed short seller David Einhorn will announce Herbalife as a short at the Ira Sohn conference on May 16th. If this does play out, Bolton Weiser believes Herbalife execs will need to take "decisive action" in order to boost shareholder confidence, specifically suggesting to lever up, add to buybacks and make a "major increases" in the dividend payment.
Bolton Weiser noted Herbalife's management could be "impotent" in a drawn out battle against Einhorn as the company is incorporated in the Cayman Islands, and cannot have negative shareholder equity.
If Einhorn does not present on Herbalife at next week's conference, the Caris analyst said the stock could "jump sharply and we may raise our rating and price target."
Herbalife shares are down 2.3 percent to $44.50 Wednesday morning.
For an analyst ratings summary and ratings history on Herbalife click here. For more ratings news on Herbalife click here.
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