small-cap

Book Profit on this NASDAQ - Listed Food & Tobacco Stock: The Hain Celestial Group Inc (HAIN)

Feb 07, 2023 | Team Kalkine

Read Time :5 min

This report is the updated version of the report uploaded on 7 February 2023 at 12:13pm PST

The Hain Celestial Group Inc

HAIN Details

The Hain Celestial Group, Inc. (NASDAQ: HAIN) is an organic and natural products company. The company manufactures, markets, distributes and sells organic and natural products.

Financial Results for the Second Quarter ended December 31, 2022

The company’s net sales decreased 5% to $454.2 Mn as compared to the prior-year period. When adjusted for foreign exchange, acquisitions, divestitures as well as discontinued brands, net sales witnessed a fall of 2% as compared to the prior-year period.
HAIN’s gross profit margin stood at 22.9%, reflecting the 170-basis point fall from the prior-year period.
North America net sales amounted to $282.4 Mn, a 3% rise as compared to the prior-year period. When adjusted for foreign exchange, acquisitions, divestitures as well as discontinued brands, net sales decreased 2% from the prior-year period mainly because of the retailer inventory adjustments, especially in tea, and lower sales in personal care, partially offset by the increased sales in snacks.

Outlook

The company has reaffirmed its financial guidance for adjusted net sales and adjusted EBITDA on the constant currency basis of -1% to +4% compared to the prior year. HAIN is looking forward to increased deployment behind the brands in order to drive topline growth.

Key Risks

Notably, disruption of operations at the manufacturing facilities, changes to the consumer preferences, disturbed general economic conditions, etc. are some of the risks HAIN is exposed to.

Fundamental Valuation

P/E Multiple Based Relative Valuation

Stock Recommendation

The stock has been valued using Price/EPS multiple based relative valuation (on an illustrative basis) and the target price so arrived reflects a fall of low double-digit (in % terms). A slight discount has been applied to Price/EPS Multiple (NTM) (Peer Average) (approx) considering the current trading levels as well as risks associated with the business.

Considering the current levels, a ‘Sell’ rating is assigned to “HAIN” stock at the current market price of USD 21.00 (as of February 07, 2023, at 06:45 AM PST).

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is February 7, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

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