Piper Jaffray Downgrades Physicians Formula (FACE) to Neutral
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Piper Jaffray downgrades Physicians Formula (Nasdaq: FACE) from Buy to Neutral and lowers its price target from $10 to $8.
The firm cites a "scanner data update for 4-wks ending August 9 for FDM excluding WMT" as its top reason for the downgrade. Specifically, Piper notes that while the overall facial cosmetics group re-accelerated during July, Physician Formula's sell-through rates fell and furthermore, its market share slipped about 10 basis points. For the month of August, the firm notes that the overall cosmetics group accelerated from 2.2% on a year-over-year basis to 5.1%, at the same time as Physician's sell-through rates went from down 6.6% year-over-year to down 9.7%.
Piper said Physicians still offers a highly differentiated brand with strong innovation, but "lacking visibility on committed linear footage increases and in view of yet another month of sluggish sell-through rates, we believe it is appropriate to trim our multiple assumption from 15x to 12x."
Physicians Formula Holdings, Inc. engages in the development, manufacture, and marketing of cosmetics for the mass market channel in the United States and Canada.
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