Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Mizuho cuts Hain Celestial stock price target along with FY24/25 guidance

Published 13/05/2024, 12:52
HAIN
-

On Monday, Mizuho Securities adjusted its outlook on Hain Celestial Group Inc. (NASDAQ:HAIN), a company known for its organic and natural products. The firm lowered the price target to $8.00 from the previous $10.00.

The adjustment follows Hain Celestial's second downward revision of its fiscal year 2024 guidance, citing both internal and external factors. The company's third fiscal quarter highlighted the challenges and uncertainties that often accompany corporate turnaround efforts.

Despite observable advancements in productivity and working capital management, the forecast for net leverage by the end of fiscal year 2025 suggests a "high-3x" figure. This projection, along with anticipated further cash flow improvements, indicates a limited potential for stock appreciation compared to the adjusted EBITDA growth of 8% expected by the market.

Hain Celestial's current trading value is approximately 9 times Mizuho's estimated CY25E EBITDA, which represents roughly a 20% discount when compared to the U.S. Food sector. The firm acknowledges a slightly favorable risk/reward balance for the stock but sees insufficient momentum to warrant a re-rating at this time.

In light of these factors, Mizuho has revised its EBITDA estimates for Hain Celestial downward for both FY24E and FY25E to $153 million and $164 million, respectively, from the previous estimates of $160 million and $169 million. Consequently, the price target has been adjusted to $8.00, based on 9.5 times the firm's projected CY25E EBITDA.

This recalibration reflects the analyst's view of the company's financial prospects and market position.

InvestingPro Insights

As Hain Celestial Group Inc. navigates through its turnaround efforts, recent data from InvestingPro provides a deeper financial perspective. With a market capitalization of $631.6 million, the company's valuation metrics present a mixed picture. The negative P/E ratio of -6.90 signals challenges in profitability, yet the strong free cash flow yield implied by the valuation suggests underlying strength in cash generation capabilities. Moreover, Hain Celestial's gross profit margin stands at 22.17%, reflecting a solid ability to retain earnings from sales after accounting for the cost of goods sold.

InvestingPro Tips highlight that despite a challenging past year with a price decline of over 50%, analysts expect net income growth this year. Additionally, the company's liquid assets surpass its short-term obligations, indicating a robust liquidity position. For investors seeking comprehensive analysis and additional insights, there are 11 more InvestingPro Tips available, which can be explored on the InvestingPro platform. To gain access to these valuable tips and enhance your investment strategy, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.