On Thursday, Piper Sandler adjusted its outlook on Hain Celestial Group Inc (NASDAQ:HAIN) shares, reducing the stock's price target from $11.00 to $8.00, while maintaining a Neutral rating.
The adjustment comes amid reported ongoing difficulties in the company's Personal Care and Baby Formula sectors, which are anticipated to persist into fiscal year 2025.
The financial firm highlighted that Hain Celestial's third-quarter fiscal year 2024 revenue was impacted by these challenges, despite growth in the company's Grow and Maintain brands, which make up 85% of its total portfolio and were up more than 3%. However, the gains from these brands were overshadowed by the poor performance of the Stabilize brands.
In response to the current situation, Hain Celestial is expediting its simplification initiatives and advancing additional restructuring actions previously scheduled for fiscal year 2025.
These efforts are part of the company's early-stage turnaround strategy, which shows potential for a stronger position in the long term.
Piper Sandler has revised its forecast for Hain Celestial's fiscal year 2024 EBITDA, decreasing the estimate from approximately $159 million to about $156 million.
Conversely, the firm has slightly increased its fiscal year 2025 EBITDA projection from roughly $164 million to approximately $167 million, citing improved margin expectations.
The price target revision to $8.00 is based on a lowered multiple of around 10 times the estimated calendar year 2025 EBITDA, down from the previous 11 times, reflecting the ongoing near-term revenue pressures faced by Hain Celestial.
InvestingPro Insights
As Hain Celestial Group Inc (NASDAQ:HAIN) navigates through its current challenges, real-time data from InvestingPro offers a snapshot of the company's financial health and market position. With a market capitalization of $597.39 million, Hain Celestial is trading at a price-to-book ratio of 0.63 as of the last twelve months leading up to Q3 2024, indicating that the stock may be undervalued relative to its assets. Despite a slight decline in revenue growth of -2.24% during the same period, the company has maintained a gross profit margin of 21.73%, showcasing its ability to retain a significant portion of sales as gross profit.
InvestingPro Tips highlight that Hain Celestial has a strong free cash flow yield, suggesting that the company is generating enough cash to return value to shareholders. This is supported by the company's high shareholder yield. Moreover, analysts predict that Hain Celestial will be profitable this year, which could signal a turnaround from its non-profitable status over the last twelve months. It's also worth noting that the company's liquid assets exceed its short-term obligations, indicating a solid liquidity position.
For investors looking for more in-depth analysis and additional tips, InvestingPro offers a wealth of information. There are 7 more InvestingPro Tips available for Hain Celestial, which can be accessed by visiting: https://www.investing.com/pro/HAIN. To make the most of these insights, readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing a comprehensive tool for making informed investment decisions.
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