The firm said it raised its rating on the company, which manufacturers primary batteries, portable lighting, and personal care products, as it believes Energizer deserves a higher multiple.
Jefferies said it is upgrading the company's rating ahead of its expected July spin-off of its battery business.
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"While group valuation looks rich, there is clear scope for multiple expansion in both batteries (improving profitability) and personal care (strategic optionality)," the firm said.
Jefferies set a $155 price target on Energizer stock, up from its previous $123 target.
Separately, TheStreet Ratings team rates ENERGIZER HOLDINGS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ENERGIZER HOLDINGS INC (ENR) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ENR's revenue growth has slightly outpaced the industry average of 1.3%. Since the same quarter one year prior, revenues slightly increased by 7.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.91, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.15, which illustrates the ability to avoid short-term cash problems.
- The gross profit margin for ENERGIZER HOLDINGS INC is rather high; currently it is at 53.89%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.46% trails the industry average.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- You can view the full analysis from the report here: ENR Ratings Report