This Analyst Is Bullish On Helen Of Troy - Read Why - Helen Of Troy (NASDAQ:HELE)

DA Davidson analyst Linda Bolton Weiser upgraded Helen Of Troy HELE from Neutral to Buy and raised the price target from $115 to $126.
The analyst said Helen should benefit from the severity of the flu season.
As CDC data showed, this flu season has started out to be one of the severest in recent history, said the analyst.
Incidence of flu symptoms reported by medical professionals hit a recent peak of 7.5% in the week ended November 27, 2022 and is still very high at 6.9%.
Weiser noted that About 20%-25% of HELE’s sales are related to the cold/flu season, including humidifiers, vaporizers, and Vicks and Braun thermometers.
Certain products in the company’s Health & Wellness segment were impacted by changes in EPA labeling requirements in FY22, and segment organic sales were -13%, cited the analyst.
But, the analyst added, strong signs of recovery were evident in F2Q23, when segment organic sales were +28% Y/Y, beating the +5% estimate.
The channel Pont Of Sales (POS) data show that growth of the health products category, that includes humidifiers and vaporizers, accelerated to +12% Y/Y in the four weeks ended December 11, 2022.
Also, the analyst said POS in F3Q23 indicated that Helen could report earnings upside surprise on January 5.
On October 5, HELE announced a new 3-year restructuring program (FY24-FY26), which will be led by new COO Noel Geoffroy, a premium global consulting firm, and a dedicated internal core team.
It is expected to result in annualized pre-tax operating profit improvements of $75M-$85M, with 25% in FY24, 50% in FY25, and 25% in FY26, the analyst said.
The analyst believes Project Pegasus will drive improved margins, cash flow, and operating and organizational efficiency.
Price Action: HELE shares are trading higher by 2.16% at $99.35 on the last check Thursday.

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This Analyst Is Bullish On Helen Of Troy - Read Why

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