UPDATE: Auriga Lowers PT to $21 on Medifast

Auriga reduces its price target $5 to $21 on Buy-rated Medifast (NYSE: MED) on persisting growing pains.

Auriga says, "Medifast announced 4Q11 results and 1Q12 guidance that was below our expectations, partially due to margin pressure associated with startup costs in its Weight Control Center expansion. While Medifast faces some headwind in the first half of the year due to these costs, we believe costs should abate as 2012 progresses, its store base matures, and as cost cutting initiatives are implemented. Once these issues are resolved, we believe the company should be on sounder ground in the latter half of the year."

MED closed at $16.70 a share on Tuesday.