UPDATE: UBS Starts Hain Celestial (HAIN) at Sell

(Updated - February 24, 2016 9:07 AM EST)

UBS initiated coverage on Hain Celestial (NASDAQ: HAIN) with a Sell rating and a price target of $33. Analyst Steven Strycula expressed concerns about slowing growth and margins.

"Hain created significant shareholder value since going public in 2000, acquiring 50+ brands while leading the charge in natural & organic foods, now a $70B US industry. But natural food is no longer niche. Today, incremental wellness consumers shop for natural foods at mass & grocery retailers, and less so at natural foods retailers where growth is slowing (~30% of US sales). Accelerating channel shifts brings new competition for HAIN, incl: better-funded CPG-owned natural brands (Annie's, Plum), retail private label (KR, COST, WMT), and niche brands (Kind, Justin's). To keep pace w/industry, HAIN must adjust its playbook to accelerate P&L investments (ad spend, trade, R&D) and streamline supply chain ops (Project Terra's $100m savings plan)," said Strycula.

Shares of Hain Celestial closed at $36.31 yesterday.

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