Nutritional supplement retailer GNC Holdings Inc. (
) on Thursday caught some bullish commentary from analysts at Wells
The firm initiated coverage on GNC with an "Outperform" rating
and $44 to $47 valuation range. That range suggests up to a 30%
upside to the stock's Wednesday closing price of $36.07.
A Wells Fargo analyst commented, "GNC has strong underlying
demand drivers from both the accelerating healthy living trend and
market share gains from grocery/drug which we believe will continue
to drive comp growth rates above many other sectors in retail. We
also see growth in eCommerce accelerating as vitamins and
supplements are a natural category for online, in our view, and
GNC's 57% penetration of proprietary, high quality, and unique
products help insulate it against Amazon. We may be early in
recommending the shares, but believe recent concerns are largely
baked in at 16x 2012E EPS of $2.28 and 13x 2013E EPS of $2.80 (for
2013E, a 42% discount to VSI and versus 23% EPS growth), and see
significant catalysts from the revamp of its loyalty and marketing
programs in 2013."
GNC shares were mostly flat in premarket trading Thursday.
The Bottom Line
Shares of GNC Holdings (
) have a 1.22% dividend yield, based on last night's closing stock
price of $36.07. The stock has technical support in the $31-$33
price area. If the shares can firm up, we see overhead resistance
around the $39-$40 price levels.
GNC Holdings Inc. (
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.4 out of 5 stars.
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