Janney Montgomery Scott Upgrades NutriSystem (NTRI) to Buy; Raises PT & Estimates

October 16, 2009 8:02 AM EDT

Janney Montgomery Scott upgrades NutriSystem (Nasdaq: NTRI) from Neutral to Buy, price target increased from $16 to $24.

Janney analyst says, "Our more positive stance reflects the view that earnings have reached a cyclical bottom, and for patient investors the risk/reward appears favorable. While the near term visibility is poor, the month of September (typically a strong diet month) could provide some modest improvement and portend a stronger than expected 1Q10 (resolution season). Recent consumer confidence readings and what appears to be a bounce off the bottom in consumer spending are encouraging signs, albeit far from being robust. Longer-term, we believe NutriSystem D and new distribution channels such as Wal-Mart (NYSE: WMT), Costco (Nasdaq: COST, and Schwan's provide new avenues of growth. While our upgrade could be a touch early given the lack of obvious turnaround signs, we believe modest positive data points could move the stock sharply higher in light of the continued large short position in these shares. We are raising our 2010 EPS estimate to $1.17 from $1.03 to reflect a modest increase in our average length- of-stay estimate, and are maintaining our 2010 forecast for flat new customer starts (better than the current -40% , though we believe there could be meaningful upside to these projections."

To see more analyst ratings on NTRI Click Here.

Related Categories

Upgrades

Stocks Mentioned

Related Entities

• Janney Montgomery Scott

Add Your Comment

Name

Subject

Body

Verification can't see the text?
click here to refresh the image.
what's this?