Vitamin Shoppe Downgraded At JPMorgan As Industry Loses Muscle

JPMorgan analyst Christopher Horvers has downgraded Vitamin Shoppe Inc VSI from Overweight to Neutral and lowered his price target from $33 to $28.

The downgrade comes in the wake of competitor GNC Holdings, Inc GNC’s earnings- and revenue-missing Q3 report.

The analyst cited three main reasons for the Vitamin Shoppe downgrade:

1. A lack of innovation in the vitamin and supplements category.
2. Wal-Mart Stores, Inc. WMT’s new focus on the category over the past year.
3. GNC’s testing of significant changes into pricing and loyalty card practice following negative comps, “particularly in the e-commerce channel.”

“In our view, these indicate the competitive environment is likely to only worsen with Vitamin Shoppe, Inc. squeezed between three larger competitors (GNC, WMT and AMZN) and this creates downside EPS risk as we look into 2017,” said Horvers.

At last check, investor reaction was weighing on the stock; Vitamin Shoppe was seen down 7.5 percent at $25.30.