Analyst Trims Price Target On Avon Products

NEW YORK (AP) — An analyst trimmed her price target and earnings estimates for Avon Products Inc. on Wednesday, but still expects profit growth later this year, following the cosmetics company's 36 percent lower first-quarter profit.

Avon on Tuesday said foreign exchange pressures and softening consumer demand crimped earnings, but the company is trying to boost the number of representatives who sell its products and offer more cosmetics at lower prices.

Caris & Co. analyst Linda Bolton Weiser, who rates the stock "Buy," expects strong profit growth later this year, when currency is less negative and spending is lower.

"We expect strong margin expansion and year-over-year profit growth in the fourth quarter," Weiser wrote in a client note.

Weiser said the company's new "smart value" strategy, or products offered at lower prices, helped in March, when momentum picked up.

The company is still holding back on raising some prices in foreign markets to gain market share, but plans more price increases later in the year.

Weiser lowered her price target by $3 to $27, but shares still have room to rise nearly 17 percent from Tuesday's closing price of $23.08.

In afternoon trading, the stock price declined 34 cents to $22.74.