Herbalife Ltd. (NYSE: HLF) has been a battleground stock for a while. However one analyst firm thinks that the fundamentals are feeling the weight of changes to the marketing plan, and it is lowering its price target. This comes at a time when currency exchange rates are adding insult to injury.

Canaccord Genuity maintained its Buy rating for Herbalife but lowered its price target to $42 from $50, noting that the company is starting to feel like a value trap and that the valuation overly discounts the business and its cash flow.

It is worth noting that short-selling activist investor Bill Ackman still maintains that this stock should be short. This mixed reading from Canaccord Genuity is good for Ackman in terms of the price target being lowered, and some of the other analysis gives credence to his position.

In its fourth-quarter earnings report last week, Herbalife reported $1.42 in earnings per share (EPS) and $1.13 billion in revenue, compared to consensus estimates of $1.22 in EPS on $1.16 billion in revenue. Canaccord Genuity had estimates of $1.27 in EPS and revenue of $1.19 billion.

The revised 2015 EPS guidance range was cut about $1.30 at the midpoint, and $0.60 of this cut was currency driven. The impact of currency was slightly higher than Canaccord Genuity expected ($0.50). The remainder of the revision reflects lower volume expectations due to the near-term disruption in marketing plan changes.

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As a result, Canaccord Genuity reduced its estimates for its 2015 full-year forecast. The firm lowered its EPS estimate to $4.20 from $5.00, as well as its revenue estimate to $4.5 billion from $4.8 billion. The revision mainly reflects the reduced volume levels in the United States, Mexico, Korea and South America.

Canaccord Genuity explained why it lowered the price target in its report:

We continue to believe that the shares are significantly undervalued assuming any reasonable resolution to regulatory scrutiny. Our Buy rating is based on the expectation of a resolution removing uncertainty without a debilitating impact on the business model that leads to a meaningful revaluation. Our valuation not only discounts the regulatory scrutiny, but also the lower growth outlook. Our $42 price target reflects 10x our new F2015 EPS estimate

Shares of Herbalife were up 1.4% at $30.87 in early afternoon trading Tuesday. The stock has a consensus analyst price target of $56.20 and a 52-week trading range of $27.60 to $69.69.

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