Cantor Fitzgerald analyst Steven Halper views the selloff yesterday in shares of Tivity Health (TVTY) following the company’s acquisition of Nutrisystem (NTRI) as “violent and probably overdone.” Indeed, the acquisition is large, Tivity will be highly leveraged, and the company should no longer be viewed as a takeover candidate, Halper tells investors in a research note. However, he believes the acquisition is a “good strategic and financial fit.” Similar to Tivity, Nutrisystem is a strong generator of free cash flow, and the combined company should continue this trend, says Halper. Further, he believes the acquisition should be accretive to Tivity earnings in 2020. The analyst reiterates an Overweight rating on the shares with a $49 price target. Tivity Health closed yesterday down 32%, or $12.96, to $27.65.
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