On Wednesday D.A. Davidson maintained his bullish stance on Nature’s Sunshine Products (NASDAQ: NATR), raising his share price target to $24.00 from $21.50 and maintaining a Buy rating.
The food and health company reported better-than-expected results for the fourth quarter of 2023, with EBITDA beating estimates. Sales in constant currencies were up 6% overall, with growth in three of the four core regions.
The company saw significant improvement in its North American market, where constant currency sales grew 13% compared to 11% growth in the third quarter of 2023. This growth occurred despite difficult comparisons with the previous year. Digital sales in North America were particularly strong, up 97% year-over-year and accounting for approximately 25% of the region’s total sales.
Looking ahead, Nature’s Sunshine Products provided guidance for 2024, expecting recurring currency sales to grow 3% to 9%. In response to this positive outlook, DA Davidson revised its sales estimate upward and increased its EBITDA guidance by 10% to $45.2 million, representing a 12% increase year-over-year.
Nature’s Sunshine Products’ long-term financial goals include achieving double-digit EBITDA margins, up from the 9.1% margin recorded in 2023. The revised $24 price target is based on 7.5 times the 2025 price target. EBITDA, which was increased from the previous estimate of $44.8 million to $49.7 million.
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