Imperial Capital Raises Price Target on Nutraceutical International Co (NUTR) Headed Into the New Quarter

Imperial Capital reiterated an Outperform rating on Nutraceutical International (NASDAQ: NUTR), and raised the price target to $29.00 (from $26.00), headed into the new quarter. Analyst Mitchell Pinheiro raised FY15 EPS estimates to $1.58 from 1.52 to reflect the strong 3Q15 results. Pinheiro also raised FY16 EPS estimate to $1.67 from $1.60 on improved volume expectations.

Pinheiro commented, "We are maintaining our Outperform rating and raising our one-year price target to $29 from $26 on NUTR shares. Our price target is about 22% above the recent share price. We are raising our FY15 earnings estimates for NUTR as the company improves its cost structure. While revenue growth
remains underwhelming (in fact, down in 3Q15), we believe the company is making progress on acquisition integration and along with other operational improvements, is expected to show more meaningful signs of margin improvement in 4Q15, with momentum continuing into 2016."

Pinheiro also added, "We remain positive on the shares as we expect the company will benefit from the increased industry regulatory scrutiny. While this could add some additional expense, quality operators such as NUTR would likely gain share as weaker operators leave the business or are consolidated. We believe NUTR’s balance sheet and free cash flow generation should allow the company to continue to participate in the consolidation of the fragmented dietary supplement segment. At 6.8x our FY15 EBITDA estimate, the stock trades at an approximate 35% discount to comparable equities in the dietary supplement sector. Our $29 price target implies a forward EBITDA multiple of 7.4x, a valuation level that is we believe can be attained should revenue growth accelerate and margins expand as forecast."

For an analyst ratings summary and ratings history on Nutraceutical International click here. For more ratings news on Nutraceutical International click here.

Shares of Nutraceutical International closed at $23.71 yesterday.

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