- Citigroup is out on Nutrisystem (NASDAQ:NTRI) reiterating their Buy rating and raising their 07-09 EPS ests by 10c, 11c, and 12c, given updated guidance.
On conf. call, mgmt mentioned some weakness during last few wks of Price (24 Jul 07) June/first few wks of July possibly due to launch of the OTC drug Alli. As a result, 3Q EPS guidance was 77c-82c vs FC of 89c. Citi thinks these concerns will be short-lived due to the potential side-effects of Alli. NTRI trends have improved over the past week. In addition, they believe that mgmt has historically been conservative and have consistently delivered on results.
NTRI was down over $9 in aftermarket last night. They would use return this opportunity to aggressively acquire shares based on their belief in the long-term business model, management's historically conservative guidance and attractive valuation.
Tgt is cut to $90 from $96 due primarly to multiple contraction by peer group.
Notablecalls: Scroll down for initial comments.
On conf. call, mgmt mentioned some weakness during last few wks of Price (24 Jul 07) June/first few wks of July possibly due to launch of the OTC drug Alli. As a result, 3Q EPS guidance was 77c-82c vs FC of 89c. Citi thinks these concerns will be short-lived due to the potential side-effects of Alli. NTRI trends have improved over the past week. In addition, they believe that mgmt has historically been conservative and have consistently delivered on results.
NTRI was down over $9 in aftermarket last night. They would use return this opportunity to aggressively acquire shares based on their belief in the long-term business model, management's historically conservative guidance and attractive valuation.
Tgt is cut to $90 from $96 due primarly to multiple contraction by peer group.
Notablecalls: Scroll down for initial comments.
I've been reading this blog for a few weeks now, and among the few hundred or so I read a day, this has EASILY become one of my favorites. Please keep up the terrific posts!
ReplyDeleteP.S. I like NTRI as well, and am getting onboard today!
surya,
ReplyDeleteThank you for your kind words. This is the kind of stuff that keeps me going.
I'm not really sure getting into NTRI
today is a wise choice. It acted well in the pre-market (anyone who bought around $55-$56 made a tidy profit early on) but I'm somewhat cautious after seeing the lack of buy interest during reg trading hrs.
But on the other hand, it's cheap. Note that Citi's tgt is still around $90, hinting ample upside.
If you buy it here, I suggest you keep a stop tad below today's low.
All the best,
NC
I've been researching and watching NTRI for over a year actively trading it. Even though my Sep 07 calls are $0 now because I bought it too early I still see NTRI moving up. Historically with strong qtrs it moves up into the end of the year. It's PEG is currently .61! I feel $49 is a bargain and it will move back up once bigger institutions start buying it again.
ReplyDeletewow. i was reading your post and although its a year old information piece its still relevant to 2008 july earnings.... with the drop and guidance. and i commented on it. i guess i had this page bookmarked for your blog.
ReplyDeleteweird. i'm playing puts on it now...though i could be wrong because usually mid-aug after the fall NTRI moves back up (so i think i'm still in the drop, although there is some bullish white candles forming). -fn