The firm raised the price target to $49 from $44 for the retailer of nutritional supplements and accessories.
Goldman Sachs said it raised GNC's rating as confidence in strategic turnaround efforts firms.
"GNC is in the early stages of a strategic turnaround, with clear imperatives that should return the company to a sustainable longterm growth algorithm by 2015," said analysts at Goldman Sachs. "We expect a fast wean off promotions, driving one more quarter of SSS declines as gross margin firms, and a return to a sustainable, double-digit EPS growth algorithm in 2015."
Shares of GNC closed up 0.17% to $42.08 on Thursday.
Separately, TheStreet Ratings team rates GNC HOLDINGS INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate GNC HOLDINGS INC (GNC) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Specialty Retail industry and the overall market, GNC HOLDINGS INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- 39.88% is the gross profit margin for GNC HOLDINGS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 9.79% is above that of the industry average.
- GNC HOLDINGS INC's earnings per share declined by 6.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GNC HOLDINGS INC increased its bottom line by earning $2.72 versus $2.29 in the prior year. This year, the market expects an improvement in earnings ($2.85 versus $2.72).
- GNC, with its decline in revenue, slightly underperformed the industry average of 1.5%. Since the same quarter one year prior, revenues slightly dropped by 2.7%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- Currently the debt-to-equity ratio of 1.74 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Even though the debt-to-equity ratio is weak, GNC's quick ratio is somewhat strong at 1.08, demonstrating the ability to handle short-term liquidity needs.
- You can view the full analysis from the report here: GNC Ratings Report