Piper Jaffray Downgrades Hain Celestial (HAIN) to Underweight Amid Delay to 10-K, Missed Guidance
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Piper Jaffray downgrades Hain Celestial (Nasdaq: HAIN) to Underweight and moves its price target from $43 to $35.
The firm said,
Given the material information released after the close yesterday, we can no longer recommend investors hold shares of Hain Celestial and are downgrading to Underweight from Neutral. We strongly believe in the natural and organic product trend and do think HAIN has some very strong brands, but we think the risks from traditional competitors, UK exposure, and internal financial control risk make the stock difficult to own.
Internal control issues add to already tough competitive dynamics: We remain concerned on Hain's ability to compete with well-capitalized traditional packaged good players looking to get more involved in the better-for-you food space. A few examples include Hormel's acquisition of Justin's (nut butter category), Campbell's Plum brand entering the organic infant formula market, and even Crisco introducing a organic coconut oil product. Private label is also a threat and we believe either Hain will struggle to drive sales or need to invest in trade/marketing support, both of which will limit earnings expansion. As we noted back in January, the departure of the CFO and resignation of the chief accounting officer in a short period of time left us concerned on the state of finance management and this announcement will likely limit multiple expansion in the near-term, the firm noted.
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