On Thursday, Piper Sandler adjusted its outlook for Hain Celestial Group Inc. (NASDAQ:HAIN), reducing the price target to $7.00 from the previous $8.00, while keeping a Neutral stance on the company's shares. The revision reflects concerns over ongoing retail challenges, despite the positive development of Hain Celestial's infant formula returning to shelves.
According to Piper Sandler, the company is experiencing persistent pressure on its retail momentum, prompting an update to the financial model. The revised model includes a decrease in the forecasted revenue for the second fiscal quarter of 2025 (F2Q25E) and an expectation for the gross margin to remain flat compared to the second fiscal quarter of 2024 (F2Q24).
The report notes that Hain Celestial has recently achieved full distribution of its infant formula products, with sufficient capacity built up during the first half of fiscal 2025 (F1H25) to ensure consistent supply to retailers. Despite this recovery, Piper Sandler has revised downward the estimated earnings before interest, taxes, depreciation, and amortization (EBITDA) for fiscal year 2025 (F25E) from approximately $165 million to about $163 million and for fiscal year 2026 (F26E) from roughly $175 million to around $173 million.
The firm's analysts have also adjusted the valuation multiple for Hain Celestial from approximately 10.0 times to around 9.0 times due to reduced confidence in the company's top-line growth prospects. Despite the lowered price target and the cautious outlook on revenue growth, Piper Sandler acknowledges the potential for near-term upside, considering the stock's currently low valuation.
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