Deutsche Bank Starts GNC Inc (GNC) at 'Buy'; Shares Get A Boost

GNC Inc (NYSE: GNC) shares are seeing upside action after Deutsche Bank initiated coverage on the stock with a Buy rating and $36 price target. Currently shares are trading at $29.01, up $0.60 (+2.11%).

Deutsche analyst has been impressed with GNC's same-store sales, product mix and flow-throughs...which, over the past 15 quarters, have helped the company deliver 4.9% same store sales growth. Deutsche bank, complimenting GNC's brand awareness, projects same-store sales of 7.0% in 2012.

The analyst titled the following paragraph: Three Ways To Win With GNC Business Model; Structurally Sound

"GNC’s EPS stream is multi-pronged: (1) retail arm (53% of EBIT); (2) franchise division (27%), & (3) manuf. segment (20%) and is structurally sound for 3 reasons. First, the VMS industry is growing mid-to-high single digits. Second, GNC is vertically integrated and generates recurring membership fees (ala COST) via its Gold Card program. Third, growth opp’s exist via Int’l franchise expansion and entering into corporate relationships (e.g. PepsicCo (NYSE: PEP), PetSmart (Nasdaq: PETM), and Sam’s Club (NYSE: WMT))."

"We are modeling FY11, FY12, and FY13 EPS of $1.47, $1.77, and $2.05,
respectively, versus the Street’s $1.46, $1.72, and $1.94 outlook."

To see more ratings on GNC, Click Here

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