JPMorgan Downgrades The Beauty Health Company (SKIN) to Underweight, 'hampered by execution challenges'
JPMorgan analyst Allen Gong downgraded The Beauty Health Company (NASDAQ: SKIN) from Neutral to Underweight.
The analyst comments "We think investors were prepared for a softer quarter from BeautyHealth given the aesthetic prints we’ve seen to date; however, there’s clearly more to unpack from a 3Q23 headlined by both a significant negative revision to the financial outlook and the exit of CEO Andrew Stanleick. To start with the silver lining of all this, we think investors will view the announced management shuffle in a more positive light as the company has struggled to execute and manage investor expectations. Regardless, we’re unsurprised to see shares indicated down significantly as a greater than expected impact from previously disclosed Syndeo challenges in the domestic market led to (1) updated 2023E guidance of $385-400M on the top (down from $460-480M) with EBITDA of 5-6% (from 18-20%) and (2) the withdrawal of previous 2025E targets. We’re downgrading shares of SKIN to Underweight from Neutral as we expect investors will wait for a revised outlook from the new CEO and relatively new CFO before revisiting a story that has been hampered by execution challenges. We are also withdrawing our prior PT of $10."
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Shares of The Beauty Health Company closed at $3.90 yesterday.