Ahead Of The Bell: Direct Sellers Upgraded

NEW YORK (AP) — Rising unemployment and access to consumers in growing overseas markets are benefiting direct sellers of products including personal care items, nutritional supplements and housewares, an analyst said Friday.

Higher joblessness means more salesperson candidates for direct sellers, as direct sales jobs frequently attract the unemployed or people searching for a part-time second job, Jefferies analyst Douglas Lane wrote in a note to clients.

He upgraded Nu Skin Enterprises Inc. and Health Sciences Inc. to "Buy" from "Hold" in a note to investors Friday. He also raised price targets and estimates for the two companies, as well as Tupperware Brands Corp., Herbalife Ltd. and Avon Products Inc., all three of which he rates "Buy."

In the second quarter, the companies beat earnings-per-share estimates by 21.5 percent, on average, Lane said. He expects the five companies to beat current Wall Street estimates for 2009, especially as they benefit from favorable foreign exchange rates.