UPDATE: B.Riley Starts Herbalife (HLF) at Buy, 'Underappreciated Global Leader'

(Updated - June 29, 2021 5:34 AM EDT)

B.Riley analyst Jeff Van Sinderen initiates coverage on Herbalife (NYSE: HLF) with a Buy rating and a price target of $70.00.

The analyst comments "HLF has emerged stronger after a contentious public battle between Carl Icahn and Bill Ackman, who held long and short positions, respectively, for several years. HLF is also flourishing, we believe, under compliance conditions mandated by a consent order following an FTC investigation that has been fully settled. Meanwhile, in our opinion, current macro trends including global obesity and increasing interest in health and wellness provide a buffet of opportunities upon which the evolved business model can feast. The three most significant product categories (~95% of FY20 revenue) are growing profitably. We expect the large legacy weight management category to continue profitable growth as high global obesity rates persist, while the increasing consumer focus on healthy active lifestyles and immunity drives two newer categories. HLF outperformed during the pandemic, as its three largest regions (~72% of LTM sales) each grew more than 10%, with North America posting the strongest growth of 39%. North American business practices that drove outperformance are being introduced to other regions. New CEO John Agwunobi has significant knowledge of the health and nutrition industry, including previous oversight of the Centers for Disease Control, National Institutes of Health, and the Food and Drug Administration. With the Ackman-Icahn battle ended, the FTC investigation resolved, wellpositioned product categories, updated and relevant messaging, consistently profitable legacy products, and effective leadership in place, we believe HLF is undervalued with the potential for multiple expansion as investors refocus on operating metrics and growth prospects."

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

Shares of Herbalife closed at $53.54 yesterday.

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