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Herbalift: Barclays Raises HLF Price Target From $78 To $94, Says Herbalife's "China Business Model Is Unique"

Tyler Durden's picture





 

The soap opera that just won't end... won't end. After last week's collapse in the price of Nuskin, which dragged down the price of Herbalife, there were some rumors that Ackman's calls for a collapse of one of the best performing stocks of 2013 may finally come true. Not so if Barclays has anything to say about it. Moments ago the British bank reported that it is raising its price target on HLF from $78 to $94, and anticipates some 34% upside from current levels.

From the just released report:

Our new EPS also reflects a large stock buyback. HLF has said it was comfortable with leverage of 2.5x, which would permit it to repurchase stock worth about $1.5bn ($1.2bn from new debt, $0.3bn from cash). HLF has many ways to execute a buyback: dutch tender, ASR, or enhanced open market purchases, but right now it is in a blackout period following YE13. We assume the stock is repurchased at prices of $80 (1Q14) and $85 (2Q14), leading to 18.4mn shares being retired. Our price target rises to $94 from $78, which represents 15.0x our new FY14 EPS of $6.27 vs 13.8x our old $5.65. We maintain our OW rating.

Cue some more theta.

 


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Tue, 01/21/2014 - 10:32 | Link to Comment One And Only
One And Only's picture

Meredeth thank you. Now go back to the kitchen.

Tue, 01/21/2014 - 11:48 | Link to Comment Manthong
Manthong's picture

Herbalife model...China..  hmm...

Does Herbalife have an organic giraffe testicle metabolic stimulant solution?

Tue, 01/21/2014 - 12:55 | Link to Comment GrinandBearit
GrinandBearit's picture

Don't forget the shark fins, the bear gallbadders and tiger sperm.

Tue, 01/21/2014 - 10:33 | Link to Comment Billy Sol Estes
Billy Sol Estes's picture

A pyramid scheme priced higher than many oil field service manufacturers, all is right in the world.

Tue, 01/21/2014 - 11:28 | Link to Comment jiggerjuice
jiggerjuice's picture

Isn't Herbalife part of the annoying Veema pyramid people? My in-laws are all-in on that nonsense... How is this even a real company. The top guy at their church started saying how Veema was magical and cured his [everything] and thusly set himself atop the moron pyramid pile... I don't see how this company keeps going up. I'm with Ackman on this, fuck Herbalife. Their Veema orange juice tastes like Kobe's face after eating Shaq's ass. Hey Icahn, tell me how my ass taste...

Tue, 01/21/2014 - 11:32 | Link to Comment ConqueringFools
ConqueringFools's picture

Mormon pyramid pile:).

Tue, 01/21/2014 - 11:54 | Link to Comment Manthong
Manthong's picture

jig?   did you pay for the juice?

..yuck.

:-D

Tue, 01/21/2014 - 10:34 | Link to Comment fonzannoon
fonzannoon's picture

I don't even think Yahoo finance gives a shit about this "story" anymore.

Tue, 01/21/2014 - 10:34 | Link to Comment Mugatu
Mugatu's picture

Somewhere a real pecker's sphincter muscle is getting spasms.

Tue, 01/21/2014 - 10:56 | Link to Comment Stoploss
Stoploss's picture

Plenty of potential in China, they will show Carl how it's done.

 

 

Tue, 01/21/2014 - 11:08 | Link to Comment EARLPEARL
EARLPEARL's picture

ackman will soon be buying some stocks in the developement of new anti-depressants if hlf goes much higher... jcp and hlf back to back is going to make it hard to recruit new investors or hold on to the ones he has.  i bet he thinks twice before suing icahn again.

Tue, 01/21/2014 - 11:14 | Link to Comment ebworthen
ebworthen's picture

Icahn must have friends at Barclays.

Tue, 01/21/2014 - 11:25 | Link to Comment Tippoo Sultan
Tippoo Sultan's picture

Touché.

Tue, 01/21/2014 - 11:31 | Link to Comment ConqueringFools
ConqueringFools's picture

Herbalife? What's next MonaVie becomes the next Apple?
What an absolute joke Wallstreet is. But everyone wants to play the game, but like a bunch of little girls when they don't win they whine and cry for government to bail them out.

It's funny how many new nail salons, spas, crossfit gyms, and dog walking businesses are opening up in my area.

Tue, 01/21/2014 - 11:48 | Link to Comment slackrabbit
slackrabbit's picture

So Barclays wants to destroy Ackman another pump & dump ....

Tue, 01/21/2014 - 11:56 | Link to Comment GFORCE
GFORCE's picture

Barclays obviously have some vested interest in the long side. This is a tad desperate trying to scramble the price back up.

If Ackman were proved right, a buyback would be pretty inconsequential.

A dutch tulip buyback.

Tue, 01/21/2014 - 12:18 | Link to Comment firstdivision
firstdivision's picture

Having a "unique business model" didn't workout so well for Enron.

Tue, 01/21/2014 - 12:53 | Link to Comment GrinandBearit
GrinandBearit's picture

I know a LOT of people and not one of them ever heard of Herbalife or used any of their products.

His timing was off, but Ackman is essentially correct... Ponzi scheme.

Tue, 01/21/2014 - 13:15 | Link to Comment silverserfer
silverserfer's picture

makes me wonder if herbalife has some secret drug they are putting in some of their products the want the masses to consume. It seems that quite a few companies that are secretly owned or sponsored by the powerful thats stock is doing way better than they should. Must  has some secret agenda that was agreed upon at a bilderberg confrence or rothschild palace.

Tue, 01/21/2014 - 16:33 | Link to Comment Freedumb
Freedumb's picture

Barclay's business model on the other hand, is not particularly unique and is based on muppet baiting

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