Energizer Stock Plunges 8% Following Several Downgrades

JPMorgan analysts upgraded Energizer (NYSE:ENR) from Underweight to Neutral and raised the price target to $39 from $32, following the company’s Q4 beat yesterday. The analysts cited a more stable outlook for the company’s top-line and bottom-line performance.

Energizer’s revenue momentum has accelerated, driven by volume growth and expanded shelf space. This improvement has been partially attributed to increased demand following recent storms, contributing approximately a 30 basis point boost. Additionally, the company has redirected savings from its Project Momentum initiative into advertising and promotions, returning to historical investment levels to further support volume growth.

The updated outlook follows Energizer’s fiscal fourth-quarter earnings report and subsequent discussions with the company’s leadership, including CEO Mark LaVigne, CFO John Drabik, and Treasurer Jon Poldan. With these adjustments, the company appears positioned for steadier growth, warranting the revised Neutral rating.

JPMorgan analysts upgraded Energizer (NYSE:ENR) from Underweight to Neutral and raised the price target to $39 from $32, following the company’s Q4 beat yesterday. The analysts cited a more stable outlook for the company’s top-line and bottom-line performance.

Energizer’s revenue momentum has accelerated, driven by volume growth and expanded shelf space. This improvement has been partially attributed to increased demand following recent storms, contributing approximately a 30 basis point boost. Additionally, the company has redirected savings from its Project Momentum initiative into advertising and promotions, returning to historical investment levels to further support volume growth.

The updated outlook follows Energizer’s fiscal fourth-quarter earnings report and subsequent discussions with the company’s leadership, including CEO Mark LaVigne, CFO John Drabik, and Treasurer Jon Poldan. With these adjustments, the company appears positioned for steadier growth, warranting the revised Neutral rating.

Energizer Holdings (NYSE:ENR) shares rose more than 6% intra-day today after Truist Securities analysts upgraded from Hold to Buy, raising the price target to $40 from $30.

The analysts cited two primary factors for the stock's underperformance relative to consumer staple peers: investor skepticism toward the battery category, worsened by COVID-induced volatility, and the company's high leverage ratio amid rising interest rates. However, the analysts expect these concerns to ease in the coming quarters as the battery segment returns to organic growth and the U.S. interest rate environment improves, presenting a buying opportunity for investors.

Energizer Holdings (NYSE:ENR) shares rose more than 6% intra-day today after Truist Securities analysts upgraded from Hold to Buy, raising the price target to $40 from $30.

The analysts cited two primary factors for the stock's underperformance relative to consumer staple peers: investor skepticism toward the battery category, worsened by COVID-induced volatility, and the company's high leverage ratio amid rising interest rates. However, the analysts expect these concerns to ease in the coming quarters as the battery segment returns to organic growth and the U.S. interest rate environment improves, presenting a buying opportunity for investors.

Shares of Energizer (NYSE:ENR), the well-known battery manufacturer, experienced an 8% drop intra-day today, following downgrades by several brokerage firms.

Morgan Stanley downgraded Energizer's rating to Underweight. The firm cited concerns about "lower visibility" and increasing risks to the company's revenue. The analysts also expressed doubts about Energizer's ability to grow its organic sales growth over time. They pointed out potential challenges in maintaining pricing power in the battery sector and the risk of declining consumer demand in some of Energizer's semi-discretionary product categories compared to its consumer packaged goods (CPG) peers.

Meanwhile, RBC Capital Markets described Energizer's financial year 2024 guidance as "tepid." The analysts adjusted the firm's stance on Energizer to Sector Perform from Outperform, setting a price target of $38 per share. The analysts’ rationale for the downgrade was based on combining the company's new, lower earnings estimates with the recent rally in its stock price, leading to the conclusion that the stock is now approximating fair value.

These downgrades and cautious outlooks came after Energizer issued full-year adjusted earnings per share guidance that fell below the consensus expectations of Wall Street analysts.

Energizer Holdings (NYSE:ENR) shares plunged nearly 5% yesterday after the company reported its Q1 results, with EPS coming in at $0.72, missing the Street estimate of $0.77. Revenue was $765.1 million, worse than the Street estimate of $789.38 million.

Organic growth was (5.4%), missing the Street expectations of (1.8%). Auto Care posted organic growth of (10.2%), notably below the Street estimate of (2.9%).

Despite a softer-than-expected topline, gross margin performance was strong, growing 150 bps year-over-year and coming in 150 bps ahead of consensus expectations. The expansion was driven by pricing initiatives, $6.5 million in savings from Project Momentum, and an accretive impact from exiting a lower margin business, but was offset by higher material and ocean freight costs and FX impact.