Bear Of The Day: Hain Celestial (HAIN)

The recent economic downturn has been exerting pressure on consumer disposable incomes triggering a shift in focus from higher priced organic products to cheaper private label brands. Consequently, retailers and distributors are being compelled to reduce inventories, thus exerting pressure on sales growth at The Hain Celestial Group (HAIN: 14.58 0.00 0.00%).

Moreover, in the natural and organic foods market, Hain Celestial faces intense price competition from big players, which could also negatively impact the company's sales and margins. However, HAIN's strategic investments and sustained effort to contain costs, increase productivity and enhance cash flows and margins has enabled it to weather the downturn to some extent.

That said, we downgrade our recommendation to Underperform and set a price target of $13 per share. The company currently has a Zacks Rank of #5 (Strong Sell).