Auriga on Nutrisystem (NTRI); Shares Remain Cheap - Despite New Promotion, Prices Above Last Year
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Price: $42.89 --0%
Rating Summary:
0 Buy, 11 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
0 Buy, 11 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Auriga reiterates a 'Buy' on Nutrisystem (NASDAQ: NTRI) price target of $17.00.
Auriga analyst says, "In our view, the market reaction to the promotion is overdone, and possibly fueled by rising short interest. The promotional was not a knee-jerk reaction to spur demand (like last year) but an initiative that was planned before the current diet season. We confirmed with the company that the anniversary promotion was previously scheduled. From our perspective, the important factor is not that the company is using price promotion, but that, so far, we believe the average selling price remains above last year's level, especially its key Select option which includes its new Chef entrees, which is priced $20 to $30 above last year's rollback prices."
"While we've refined our 1Q12 EPS estimate, trimming it by $0.02 to $0.14, we continue to view Nutrisystem shares as attractive especially with the recent pull back and its dividend yield over 6%. Nutrisystem also trades for under 4x our 2012 EBITDA estimate."
For an analyst ratings summary and ratings history on Nutrisystem click here. For more ratings news on Nutrisystem click here.
Shares of Nutrisystem closed at $11.40 yesterday.
Auriga analyst says, "In our view, the market reaction to the promotion is overdone, and possibly fueled by rising short interest. The promotional was not a knee-jerk reaction to spur demand (like last year) but an initiative that was planned before the current diet season. We confirmed with the company that the anniversary promotion was previously scheduled. From our perspective, the important factor is not that the company is using price promotion, but that, so far, we believe the average selling price remains above last year's level, especially its key Select option which includes its new Chef entrees, which is priced $20 to $30 above last year's rollback prices."
"While we've refined our 1Q12 EPS estimate, trimming it by $0.02 to $0.14, we continue to view Nutrisystem shares as attractive especially with the recent pull back and its dividend yield over 6%. Nutrisystem also trades for under 4x our 2012 EBITDA estimate."
For an analyst ratings summary and ratings history on Nutrisystem click here. For more ratings news on Nutrisystem click here.
Shares of Nutrisystem closed at $11.40 yesterday.
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