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DA Davidson maintained a bullish position on Nature’s Sunshine Products (NASDAQ: NATR) on Wednesday, raising the stock’s price target to $24.00 from $21.50 and maintaining a Buy rating.
The nutritional and wellness products company reported a better-than-expected performance in the fourth quarter of 2023, with EBITDA exceeding estimates. Sales in constant currency terms increased 6% overall, with three out of four major regions growing.
The company reported significant improvement in the North American market, where constant currency sales grew 13%, compared to an 11% increase in the third quarter of 2023. This growth occurred despite a challenging comparison to the year previous. Digital sales in North America were particularly strong, showing an increase of 97% year over year and representing approximately 25% of the region’s total sales.
Looking ahead, Nature’s Sunshine Products provided guidance for 2024, forecasting constant currency sales to increase between 3% and 9%. In response to this positive outlook, DA Davidson adjusted its sales estimate upward and increased its EBITDA projection by 10% to $45.2 million, which would represent a 12% year-over-year increase.
Long-term financial goals for Nature’s Sunshine Products include achieving a mid-to-high double-digit EBITDA margin, compared to the 9.1% margin reported in 2023. The revised price target of $24.00 is based on a multiple of 7.5 times expected for 2025. EBITDA, which was raised from the previous estimate of $44.8 million to $49.7 million.
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