GNC Holdings Started as an “Outperform” at Wells Fargo; Expects Healthy Trends and Online Growth to Continue (GNC)

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Nutritional supplement retailer GNC Holdings Inc. ( GNC ) on Thursday caught some bullish commentary from analysts at Wells Fargo.

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 ( GNC ) 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. ( GNC ) is not recommended at this time, holding a Dividend.com 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 .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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