USNA - USANA Health Sciences stock slumps on poor preliminary results Jefferies cut to Sell

Trouble in China, an adverse macroeconomic backdrop, and underperformance of company initiatives all served as impetus for a “big cut” to a bearish rating on USANA Health Sciences ( NYSE: USNA ) shares from Jefferies.

Shares of the Salt Lake City-based consumer staples stock slipped over 14% shortly after the US market open on Thursday after offering a pessimistic preliminary earnings announcement on Wednesday evening. The significant drop adds to an over 35% decline year to date. The outsized move is particularly notable given the typically low volatility of the stock.

Equity analyst Stephanie Wissink told clients on Thursday that more downside could be in store.

She explained that her new “Underperform” rating reflects reduced top line estimates in line with disappointing company guidance and a slowdown in China that is proving more persistent than previously anticipated. As nearly half of sales are tied to China, the softening of sales observed in the announcement promote significant anxiety about overreliance on the region. She added that margin pressure remains a problem amidst an unkind macroeconomic environment in a global sense.

As such, she cut her price target to $53 from a prior $78 alongside the downgrade.

Dig into recent price action for shares .

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