Nutrisystem Inc. (NASDAQ: NTRI) shares plummeted Monday after accepting a downgrade.
D.A. Davidson analyst Linda Bolton Weiser downgraded the banal from Neutral to Underperform and bargain her amount ambition from $40 to $28.
Bolton Weiser has lower aplomb NutriSystem can accomplish greater than 30 percent EBITDA advance in the fourth quarter, and as as aftereffect is blurred estimates.
The analyst says the aggregation could cut its 2018 admonition back it letters in a few weeks, and thinks addition hit to management’s believability and added ambiguity surrounding the new year diet division could account the banal to barter in the low end of its three-year P/E range.
“We are anxious by the breakable Google chase trends for South Beach and are blurred our 2018E sales for the cast by $2M to $70M,” the analyst address in a note.
Although new TV ads are improved, the analyst says they’re still off-trend.
“NTRI’s post-June new TV ads accept a added a attending and are beneath cluttered, but they still affection Marie Osmond and accent vanity rather than wellness, for example, the 60-second atom that aired in August for the back-to-school auction featured a albino in a red dress continuing aing to a sports car,” Bolton Weiser said.
NutriSystem has a notable amusing media presence, “but it’s aloof not active sales.” Amount discounting is acceptable to abide to clean barter in the fourth quarter, added blurred Bolton Weiser’s aplomb it can accomplish accord fourth division EBITDA advance of 33 percent.
NutriSystem shares were bottomward 12 percent to $32.56 at time of publication.
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