On Tuesday, DA Davidson adjusted its outlook on USANA Health (NYSE:USNA) Sciences Inc. (NYSE: USNA) shares, reducing the price target to $46 from the previous $48, while maintaining a Neutral rating on the shares. This adjustment follows USANA's first-quarter earnings report on April 30th, which highlighted a mixed performance across its market segments.
USANA, which operates in the health and nutrition sector, experienced a successful incentive offering in China that helped beat earnings expectations for the first quarter of 2024. However, the company faced challenges in other key markets, with three of its four segments reporting double-digit declines year-over-year in constant currency terms.
The company also expressed concerns over ongoing consumer price sensitivity and anticipates a slowdown in the second quarter, which is expected after a strong promotional period. In response, DA Davidson has revised its second-quarter 2024 earnings per share (EPS) estimate for USANA to $0.68, down from $0.75.
While the firm has lowered its 2024 constant currency sales forecast for USANA, it has slightly increased its annual EPS estimate by $0.05. The reduced price target reflects a change in the target price-to-earnings (P/E) ratio, now set at 16 times from the earlier 17 times, and is based on the projected 2025 EPS of $2.90.
Despite the top-line uncertainty, USANA's financial health is underscored by its net cash position, which stands at approximately $17 per share. This detail provides a snapshot of the company's balance sheet strength amid shifting market conditions.
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