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Citi Sees 12.6% Upside In Nu Skin Shares; Lifts Estimates, Price Target

Citi raised its estimates and price target of Nu Skin Enterprises, Inc. shares to $52 on the recent strategic investment and less forex pressure to 2016 sales. The brokerage sees an upside of 12.6 percent in the shares.

Analyst Beth Kite has raised 2016 EPS estimate to $2.80 (flat year-over-year) from $2.75 and 2017 EPS view to $3.22 (+15 percent year-over-year) from $3.10. The Street expects EPS of $2.75 and $3.15 for 2016 and 2017, respectively.

NU Skin recently announced strategic investment in the form of $210 million convertible senior notes, which the company intends to use for share repurchases.

"We previously valued NUS at a 10 percent discount to the market multiple due in part to caution on its launch plans in China, for which we now have more visibility. With our 2017 EPS estimate of $3.22, this yields a target price of $52, representing an ETR of greater than 15 percent, such that we maintain our Buy rating," Kite wrote in a note.

"We think the potential lift to reps and sales from Me and Youth in 2H16 makes the entry point of 14x compelling," said Kite, who raised the price target to $52 from $45.