Late last month, billionaire hedge fund manager William Ackman told CNBC that he had given up on his $1 billion bet against multilevel marketing company Herbalife Ltd. (HLF) following a five-year-plus battle against the Los Angeles-based company. The on-air announcement coincided with a dispute with Carl Icahn, a former "special advisor" to President Trump and one of Herbalife's biggest investors. In response to the news, one team of bulls on the Street views Ackman's exit, and therefore a sharp reduction in negative media coverage, as a major positive headwind for the nutritional supplement company's stock. (See also: Icahn Sold Steel-Related Stock Ahead of Tariffs.)

Since 2012, Ackman's Pershing Square Capital had been attempting to uncover Herbalife as a pyramid scheme, which it claimed specifically targeted underserved minority groups. While in November, Pershing Square announced a new strategy to convert its short position to outright put positions in order to cap its losses, the hedge fund manager has finally thrown in the towel. 

In a note to clients Monday, analysts at Citi Research lifted their rating on HLF to buy from neutral, citing the company's attractive valuation relative to the market, as reported by CNBC. Up 0.9% on Tuesday morning at $95.13, HLF reflects a whopping 73.7% increase over the most recent 12-month period and a 40.2% gain year-to-date (YTD), compared to the S&P 500's 2% gain so far in 2018. 

Giving Herbalife 'A New Look'

"Even with the rise in the stock, we see upside as Herbalife executes a tender offer and refinances its debt, to both reinvest in the business and repurchase shares in 2019," wrote Citi's Beth Kite. “We expect Ackman's exit may mean that some investors give Herbalife a new look as headline risk has dissipated, we contend that Herbalife should trade at a 10% premium to the market." 

Kite foresees Herbalife shares rising nearly 20% from current levels to $114 over the next 12 months, compared to her previous price target at $85. She added that "from a fundamental point of view," if the company can execute on its local currency sales growth guidance this year, "it would be one of the best top line stories in HPC [Household/Personal Care Products]." (See also: William Ackman’s Crusade to Take Down Herbalife.)