Analyst: Hain Celestial Group shares to rise on 4Q momentum, 2011 outlook above estimates

Ahead of the Bell: Hain Celestial Group

MELVILLE, N.Y. — A Citigroup analyst says he expects shares of natural foods company Hain Celestial Group Inc. to rise Thursday after the company posted impressive sales momentum that will increase its results in coming years.

Analyst Greg Badishkanian raised his own estimates Thursday, a day after the company said that fiscal 2011 results will come in above current estimates.

He said the shares of the maker of Celestial Seasonings tea and other foods was attractive and investor expectations have been low on the company.

On Wednesday, Hain reported a sharp increase in fiscal fourth-quarter earnings, helped by lower costs and stronger sales in North America and parts of Europe.

Badishkanian noted revenue was up in the quarter and the company said U.S. consumption trends were improving.

“Given other leisure/discretionary sectors we cover have seen a deterioration in sales trends,” both on a year-to-year basis in the second quarter and also from the first quarter,” he said. “We’re impressed by this momentum.”

Shares should rise on the news, he said. Shares closed at $20.65 on Wednesday.

“If Hain can hit analyst estimates over the next few quarters, we could see nice continued stock upside,” the analyst wrote.

He maintained his target share price of $26.

On Wednesday, the company said it expected fiscal 2011 earnings of $1.24 to $1.31 per share on sales of $1.025 billion to $1.05 billion.

Analysts foresee $1.22 per share of earnings on sales of $992.9 million, according to Thomson Reuters.

Badishkanian raised his estimate by a nickel to $1.28 per share.