On Thursday, DA Davidson initiated coverage on Hain Celestial Group Inc. (NASDAQ:HAIN) with a Neutral rating and a price target set at $10. The firm highlighted potential areas for growth and margin improvement but expressed concerns over the complexity of the company's portfolio.
The coverage notes that Hain Celestial could capitalize on "under penetrated or unexplored pockets" such as e-commerce and the Away From Home sector. DA Davidson also pointed to "low hanging margin fruit," suggesting that there may be straightforward opportunities for the company to improve its profitability following a difficult three-year period.
Despite these opportunities, the firm remains cautious, citing the complexity of Hain Celestial's portfolio as a significant hurdle. According to the firm, this complexity has historically led to challenges in executing a unified growth strategy, as seen in the company's repeated failures to achieve sustained organic growth over the past ten years.
DA Davidson further explained that it could take until the fiscal year 2026 to determine whether the current turnaround efforts will be successful. Given this uncertainty, the firm recommends a "wait and see" approach to investing in Hain Celestial, even though the current valuation might seem attractive.
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