Hain Celestial Group Holdings (NASDAQ:HAIN) stock slumped on Wednesday as analysts downgraded the name after its Tuesday morning earnings release.
“We believe there are risks to F4Q23's implied guidance and consensus expectations for F24 earnings are still too high, perhaps by 10-15% or more,” Piper Sandler analyst Michael Lavery said.
He added that while the company still operates attractive brands, the company’s spending plans look as though they will hit earnings power. Further, the company’s maintenance of full-year guidance looks overly ambitious to Lavery. As such, he cut his rating to Underweight from a prior Equal-Weight rating and trimmed his price target to $17 from $19.
“We believe higher spending levels are important, but believe there could be downside risk to the stock if earnings get reset, as seems likely to,” Lavery concluded.
JP Morgan analyst Ken Goldman also cut his rating on the stock on Wednesday. Goldman took his rating to Neutral from Overweight given valuation concerns and a desire to take a more cautious stance on growth projections. He added that his downgrade is not motivated by the CEO shift announced in late 2022.
Shares of the New York-based natural foods company fell 6.48% shortly after Wednesday's market open.
Read more on the earnings results reported on Tuesday.