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The Hain Celestial Group Inc HAIN

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Labor Shortages Disrupt Hain Celestial’s Q4 Sales, but Long-Term Outlook Looks Healthy

Analyst Note

| Rebecca Scheuneman, CFA |

Ahead of no-moat Hain Celestial’s fiscal fourth-quarter report, we increased our fair value estimate to $41 from $35, as we expect the firm’s transition from a decentralized holding company to an integrated operating organization to lead to significant cost savings. Among the changes in our model, we increased our long-term operating margin forecast to above 16% from 14%. Hain’s fourth-quarter results reinforced that the firm is on track to achieve our long-term targets, and we don’t anticipate a material change to our recently raised valuation, leaving shares fairly valued.

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Company Profile

Business Description

Hain Celestial makes better-for- you natural and organic consumer products, with 69% of fiscal 2020 revenue considered grocery, 15% snacks, 10% personal care, and 6% tea. Some of the company's most recognized brands are Celestial Seasonings (tea), Terra (chips), Garden of Eatin' (chips), Sensible Portions (snacks), The Greek Gods (yogurt), Earth's Best (baby food and care), and Ella's Kitchen (baby food). The company primarily sells in developed markets, including the U.S. (49% of revenue), U.K. (32%), Canada (8%), and Europe (11%). Its products can be found in traditional grocery stores, natural foods supermarkets, specialty health stores, mass-market retailers, club warehouses, drugstores, convenience stores, and restaurants and e-commerce sites.

Contact
1111 Marcus Avenue, Lake Success
New York, NY, 11042
T +1 516 587-5000
Sector Consumer Defensive
Industry Packaged Foods
Most Recent Earnings Jun 30, 2021
Fiscal Year End Jun 30, 2021
Stock Type Slow Growth
Employees 3,087

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