Deutsche Bank Downgrades GNC Corp. (GNC) to Hold

Deutsche Bank downgraded GNC Corp. (NYSE: GNC) from Buy to Hold with a price target of $40.00 (from $55.00).

Analyst Karen Short said, "On the back of a difficult quarter and a lackluster outlook for the remainder of FY14, we are downgrading shares of GNC to Hold with a $40 price target. We had maintained a Buy on the stock until now because we expected comps and margin trends to improve as warmer spring weather arrived and as GNC’s core health-focused customer resumed more normalized behavior. However, despite an uptick in March comps, GNC revised down its FY14 outlook for comps and EPS and explanations were less than reassuring. As a result, with sales growth down sharply this year, we are now seeing de-leverage, and with few near-term catalysts to drive upside to comps or margins, we expect GNC’s earnings growth trajectory and multiple to compress and expect the shares to be range-bound for at least the next several quarters. Thus, we are downgrading GNC to Hold."

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

Shares of GNC Corp. closed at $43.65 yesterday.

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