Citi Downgrades Alberto-Culver (ACV) to Hold

November 3, 2008 8:50 AM EST

Citi downgrades Alberto-Culver Co (NYSE: ACV) from Buy to Hold. Price target $26.

Citi analyst says, "We remain big fans of the ACV story, given the company’s prospects for strong top line growth (thru market share gains in the U.S. given its value-priced hair and skin care brands, and overseas thru further international expansion for both the TRESemmé and Nexxus brands) coupled with solid margin expansion. We also like that ACV boasts a strong balance sheet (with almost no debt and roughly $450 million in cash on hand)...But, A Lot of the Reasons We Liked the Stock Are Behind Us — We’ve recommended this stock this year owing to: (1) our excitement over the probable sale of Cederroth (which is now behind us), (2) the likely beating-of-consensus (which has happened, but which may happen less going forward given the pressure that the stronger dollar and increased competition could put on ACV’s business) and (3) the possibility of a takeover of the company (which we suspect is less likely in the near term given the credit environment)...And, the Stock is a Little Rich for Our Taste —ACV's shares have outperformed the market by roughly 40% year to date."

Alberto-Culver Company (New Alberto-Culver), through its subsidiaries, operates two segments: Consumer Packaged Goods and Cederroth International.

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