Wedbush Upgrades GNC Corp. (GNC) to Outperform

Wedbush upgraded GNC Corp. (NYSE: GNC) from Neutral to Outperform with a price target of $46.00 (from $34.00). Analyst Kurt Frederick noted reduced promotions and easier comps.

"We have seen a decline in store promotional activity in recent weeks following heavy discounting in July/August. Although trends haven’t experienced noticeable improvement, recent mailer with coupons personalized to prior purchases, signage less focused on discounting and new products including expanded MusclePharm and GNC PureEdge product lines are a step in the right direction,in our view. Online promotions remain high, however, which we expect to continue," said Frederick.

"GNC faces its most difficult comp of the year in Q3 due to 3Q13 benefit from change to member pricing, DMAA change-over and heavy use of bundling. We expect margins to improve over 4Q14 when heavy discounting, as inclement weather began impacting markets, led to a 90 bp decline in y/y gross margins and negative media around fish oil and multivitamins impacted sales. Then, SSS comparisons get significantly easier in 1Q15 when planned expansion of Total Lean and PureEdge lines occur, as well as plans to grow adjacent categories such as plant-based proteins and functional foods. Further, sentiment remains low and estimates have come in significantly in recent months," he added.

For an analyst ratings summary and ratings history on GNC Corp. click here. For more ratings news on GNC Corp. click here.

Shares of GNC Corp. closed at $39.16 yesterday.

You May Also Be Interested In

• HSBC Downgrades Feng Tay Enterprises (9910:TT) to Hold
• AvidBank Holdings Inc. (AVBH) PT Lowered to $23 at Piper Sandler
• Yageo Corp. (2327:TT) (YAGOY) PT Lowered to NT$656 at HSBC