UBS Downgrades Energizer Holdings to Neutral on Lower Profit Estimate
November 25, 2023
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Energizer Holdings ($NYSE:ENR), Inc. is a global consumer goods company that produces and markets a wide range of household batteries and lighting products. Recently, UBS has downgraded their rating of Energizer Holdings from a “buy” to a “neutral” due to revised estimates of profit. UBS has stated that the reduction in profits is due to a combination of factors including slowing sales in the U.S., higher commodity prices, and unfavorable currency exchange rates. These unfavorable conditions not only have put pressure on Energizer’s profits, but also have increased the company’s debt load. Despite the downgrade, UBS highlighted that Energizer Holdings remains one of the top five battery-makers in the world and has a strong presence in emerging markets.
Additionally, UBS is expecting Energizer to increase their dividend payout, leading to increased shareholder value.
Market Price
On Tuesday, UBS downgraded its rating of ENERGIZER HOLDINGS stock from ‘buy’ to ‘neutral’, citing lower profit estimates. This news sent the stock into a free fall, as it opened at $31.5 and closed at $30.8, representing a decrease of 2.2% from its previous closing price of $31.5. Analysts cite increased competition in the battery sector and the economic slowdown as factors that have weighed heavily on the company’s profitability. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Energizer Holdings. More…
| Total Revenues | Net Income | Net Margin |
| 2.96k | 140.5 | 6.5% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Energizer Holdings. More…
| Operations | Investing | Financing |
| 395.2 | -56.1 | -309.4 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Energizer Holdings. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 4.51k | 4.3k | 2.95 |
Key Ratios Snapshot
Some of the financial key ratios for Energizer Holdings are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 2.5% | 3.4% | 11.6% |
| FCF Margin | ROE | ROA |
| 11.4% | 114.0% | 4.8% |
Analysis
At GoodWhale, we recently conducted an analysis of how well Energizer Holdings is doing in terms of its wellbeing. We used the Star Chart, a tool that analyses companies and assigns them into categories, to classify Energizer Holdings as a ‘cow’, a type of company that has the track record of paying out consistent and sustainable dividends. As such, we determined that this type of company would be attractive to investors looking for dividend income. From our analysis, Energizer Holdings is strong in dividend, profitability, and medium in growth; although it is weak in asset. Furthermore, it has a high health score of 7/10 with regard to its cashflows and debt, and is thus capable to safely ride out any crisis without the risk of bankruptcy. More…
Peers
Its products are used in a wide range of applications, including electronic devices, power tools, and medical devices. The company’s primary competitors are TNR Technical Inc, Leoch International Technology Ltd, and HBL Power Systems Ltd.
– TNR Technical Inc ($SEHK:00842)
Leoch International Technology Ltd is a Hong Kong-based company principally engaged in the research, development, manufacture and sale of lead-acid batteries and related products. The Company operates its business through three segments. The Battery segment is engaged in the production and sale of lead-acid batteries, including automotive batteries, motorcycle batteries, wheelchairs batteries, electric bicycle batteries, general batteries, golf cart batteries, marine batteries, power batteries, solar batteries, storage batteries and other lead-acid batteries. The Recycling segment is engaged in the recycling of lead acid batteries and related products. The New Energy segment is engaged in the provision of new energy storage solutions.
– Leoch International Technology Ltd ($BSE:517271)
HBL Power Systems Ltd is an Indian engineering company that manufactures a range of products for the power sector, including power generation equipment, power transmission and distribution equipment, and railway electrification equipment. The company has a market cap of 29.44B as of 2022 and a return on equity of 9.55%. HBL Power Systems Ltd is a publicly traded company listed on the Bombay Stock Exchange and the National Stock Exchange of India.
Summary
UBS recently downgraded the stock of Energizer Holdings (ENR) from a “buy” to a “neutral” rating based on its lower profit estimates. Investors should consider the risks associated with the stock, such as the impact of foreign exchange rate fluctuations, changes in commodity prices, and increased competition in the markets. Furthermore, there is uncertainty surrounding the company’s strategic direction and its ability to successfully execute on its initiatives. Investors should also be aware of the effect of cost-cutting measures, such as price reductions or marketing campaigns, which could impact overall profitability.
Additionally, the potential for slow growth in certain product categories or potential disruptions in supply chains can also represent risks for shareholders. Ultimately, investors should carefully evaluate these risks to decide if ENR is a suitable investment for their portfolio.
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