RXSD Rexall Sundown Message Board

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Biotech / Medical : RXSD Rexall Sundown

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To: Dorine Essey who wrote (174)	11/6/1998 1:50:00 AM
From: Jeffrey Lee	of 327

About RXSD Rexall Sundown for November 06, 1998 from Argus Independent Equity Research: There was heavy selling in the RXSD shares of the Rexall Sundown after an analyst downgrade prompted the company to issue a report predicting a year-over- year decrease in the first quarter due to a sequential decline in nutritional supplement sales in the past month, which prompted retailers to scale back some of their orders. However, the industry growth rate remains at 15%, far better than most consumers goods businesses. Moreover, we believe that Rexall, due to its strong direct selling network and relationships with major retailers such as Wal-Mart and Dollar General, will maintain its leadership position in the industry. We are lowering our estimates from $1.34 to $1.24 for 1999 and from $1.75 to $1.61 for the year 2000. However, we maintain our BUY rating and remain bullish on the fundamentals of the nutritional supplement business and on Rexall Sundown. The RXSD shares are trading at 12.5 times 1999 earnings and 9.6 times our estimate for the year 2000, despite a growth rate in the 20-25% range. We regard the current selling frenzy as a buying opportunity. The BUY-rated RXSD shares closed Thursday at $13-1/16, down 8-15/16. (LHB)

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