Deutsche Bank Upgrades GNC Holdings to "Buy"; Boosts Price Target, Estimates (GNC)

Deutsche Bank Upgrades GNC Holdings to “Buy”; Boosts Price Target, Estimates (GNC)


Deutsche Bank analysts upgraded health and wellness product retailer GNC Holdings Inc (GNC) on Tuesday as the stock’s risk/reward leans favorably to the upside.

The analysts upgraded GNC from “Hold” to “Buy” and see shares reaching $50, up from the previous target of $44. This new valuation suggests a 29% upside to Monday’s closing price of $38.88.

A Deutsche Bank analyst commented, “Despite near-term headwinds, including tough YOY compares in 1Q/2Q, we like the set-up today, with GNC trading at just 11.7x our new FY14 EPS est. Investor fears seem more than discounted into the shares, and we see the risk/reward as now skewed favorably to the upside. Solid secular demand tailwinds, company-specific initiatives driving product innovation, brand awareness, traffic, and mgmt’s track record of conservative guidance give us added confidence that GNC should meet or exceed expectations for this year and that EPS growth should remain strong in ’14.”

The firm also boosted GNC’s fiscal 2013 EPS estimate from $2.78 to $2.80. For fiscal 2014 the EPS estimate was increased from $3.24 to $3.32.

GNC Holdings shares were up $1.08, or +2.78%, in morning trading on Tuesday. The stock is up +19.74% year-to-date.

The Bottom Line
Shares of GNC Holdings (GNC) have a dividend yield of 1.54% base don last night’s closing price of $38.88 and the company’s annualized dividend payout of 60 cents per share.

GNC Holdings Inc (GNC) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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