What Happened?
Shares of health and wellness products company Herbalife (NYSE: HLF) jumped 10.8% in the afternoon session after Argus Research upgraded its rating on the company's stock to 'Buy' from 'Hold' and set a new price target of $15.
The research firm pointed to expected revenue growth from new products as the key reason for its positive view. Argus projected that Herbalife would achieve mid-single-digit revenue growth in 2025, which would end a three-year period of declines. The firm specifically noted two products, a skin-health product called HL/Skin and a weight-loss supplement named MultiBurn, as likely drivers for accelerated growth in 2026. The upgrade suggested a potential positive outlook for the company's future performance.
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What Is The Market Telling Us
Herbalife’s shares are very volatile and have had 27 moves greater than 5% over the last year. But moves this big are rare even for Herbalife and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 20 days ago when the stock gained 8.3% on the news that the company reported third-quarter financial results that surpassed analyst expectations.
Herbalife posted net sales of $1.27 billion, a 2.7% increase from the same period last year, narrowly beating revenue forecasts. More impressively, the company's adjusted earnings per share came in at $0.50, exceeding analyst predictions by 8.4%. The positive results were driven by strong profitability, as adjusted EBITDA of $184.2 million beat consensus estimates by over 16%. Additionally, the company's free cash flow margin improved significantly to 9.3% from 5.8% in the prior year's quarter, indicating stronger cash generation.
Herbalife is up 95.5% since the beginning of the year, and at $13.06 per share, has set a new 52-week high. Investors who bought $1,000 worth of Herbalife’s shares 5 years ago would now be looking at an investment worth $265.43.
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