Wedbush Downgrades Hain Celestial (HAIN) to Neutral; Takeout Speculation 'Fully Subdued', Says Analyst
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Wedbush downgraded Hain Celestial (NASDAQ: HAIN) from Outperform to Neutral with a price target of $37.00 (from $51.00). Yesterday the company said it would delay Q4 results. It also said it does not expect to achieve its previously announced guidance for fiscal year 2016.
Analyst Phil Terpolilli commented on the news, saying, "HAIN announced yesterday internal control questions on its financial reporting and that it would miss FY16 guidance. We continue to believe HAIN has a multi-year cost savings story and distribution growth opportunities, but with its realignment of brands in its portfolio expected to take time to bear fruit, uncertainty as to the ultimate impact of accounting questions and disappointing FY16 results to expectations, we have limited conviction HAIN shares offer much near-term upside."
"With questions on accounting and delayed release, we view the likelihood of any potential CPG suitor, already somewhat challenging given HAIN’s fragmented brand base, as unlikely for now," continued the analyst.
Terpolilli added, "While the brand portfolio may not compare favorably with some peers, HAIN maintains numerous $100M+ revenue brands with exposure across multiple channels. However, with lack of takeout potential, we doubt developing brand value will help HAIN near-term."
Shares of Hain Celestial closed at $53.40 yesterday.
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