Stifel has revised its price target for Hain Celestial (HAIN, Financial), decreasing it from $6 to $4 while maintaining a Hold rating on the stock. This adjustment emerges from the broader assessment of the firm's Food group, which faces a challenging outlook.
The analyst's revision reflects anticipated pressures from inflation and increased investment levels, factors that are expected to compress margins. Despite an expected 1% growth in organic sales, these pressures are projected to contribute to an estimated 9% decline in earnings per share (EPS) for the group by 2025.
Additionally, foreign exchange dynamics have influenced the adjustment of sales and EPS estimates within the firm's coverage, further shaping the outlook for Hain Celestial and its peers.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 12 analysts, the average target price for The Hain Celestial Group Inc (HAIN, Financial) is $6.23 with a high estimate of $10.00 and a low estimate of $4.00. The average target implies an upside of 112.02% from the current price of $2.94. More detailed estimate data can be found on the The Hain Celestial Group Inc (HAIN) Forecast page.
Based on the consensus recommendation from 15 brokerage firms, The Hain Celestial Group Inc's (HAIN, Financial) average brokerage recommendation is currently 2.5, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for The Hain Celestial Group Inc (HAIN, Financial) in one year is $10.80, suggesting a upside of 267.35% from the current price of $2.94. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the The Hain Celestial Group Inc (HAIN) Summary page.
HAIN Key Business Developments
Release Date: February 10, 2025
- Organic Net Sales: Declined 7% in the second quarter.
- Free Cash Flow: $25 million generated in the quarter.
- Net Debt Reduction: Reduced by $12 million in the quarter.
- Adjusted EBITDA: $38 million for the quarter.
- Adjusted EBITDA Margin: Increased by 350 basis points from the first quarter.
- Adjusted Gross Margin: 22.9%, a decrease of approximately 60 basis points year-over-year.
- SG&A Expenses: Decreased 5% year-over-year to $70 million.
- Interest Costs: Fell 21% year-over-year to $13 million.
- Adjusted Net Income: $8 million or $0.08 per diluted share.
- North America Organic Net Sales: Declined 9% year-over-year.
- International Organic Net Sales: Declined 4% in the quarter.
- Free Cash Flow Improvement: $25 million compared to $15 million in the prior year period.
- Cash on Hand: $56 million at the end of the quarter.
- Net Debt: $672 million.
- Net Leverage Ratio: 4.1 times.
- Fiscal 2025 Outlook: Organic net sales expected to be down 2% to 4%; adjusted EBITDA to be flat year-over-year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- The Hain Celestial Group Inc (HAIN, Financial) reported strong operating cash flow and reduced net debt by $12 million in the quarter.
- The company saw sequential improvement in the Baby & Kids segment, driven by the recovery in infant formula supply and growth in Earth's Best brand.
- Hain Celestial's Greek Gods Yogurt showed healthy velocities and increased household penetration, contributing positively to the Meal Prep category.
- The company is expanding its distribution, particularly in the snacks category, with a 5% increase at its largest retail partner and significant gains in convenience stores.
- Hain Celestial's focus on better-for-you products, free from artificial colors and flavors, positions it well to meet increasing consumer demand for healthier options.
Negative Points
- The Hain Celestial Group Inc (HAIN) experienced a 7% decline in organic net sales in the second quarter, primarily due to poor in-store performance in snacks and short-term supply challenges.
- Adjusted EBITDA decreased to $38 million from $47 million a year ago, reflecting lower sales and pricing challenges.
- The company faced short-term service issues in the beverage category, impacting Celestial Seasonings sales due to a shortage of a key raw material.
- Despite distribution gains, the snacks category struggled with velocity on shelves, affecting overall sales performance.
- The macroeconomic environment remains volatile, prompting a more cautious outlook for the full fiscal year, with expected organic net sales down 2% to 4%.
