Hain Celestial Group's Price Target Trimmed At UBS

UBS has cut Hain Celestial Group Inc HAIN's price target by $7 to $33, citing continued valuation risks amid an unknowable audit outcome.

In addition, analyst Steven Strycula believes consensus FY17 sales and EPS estimates for Hain remain too high and see downside risk on the same.

Further, Strycula trimmed his below-consensus FY17 EPS view to $1.95 from $2.05 versus Street at $2.15 based on +4 percent global organic sales (incl. +3 percent U.S).

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The analyst, who maintains his Sell rating on the stock, attributed the downward revision to slower U.S. scanner data trends, falling non-measured U.S. grocery SSS trends, currency headwinds and SKU rationalization.

On the valuation front, Strycula's base case assumes no immediate audit clarity and values Hain using trailing 12-month FCF/share ($1.65) in place of adjusted EPS $1.97.

"Our $33 target is based on 20x Hain's trailing 12m FCF/share of $1.65 — which implies a 5 percent FCF yield (in line w/food peers)," Strycula added.

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