This story originally appeared on Zacks
Energizer (ENR) is a Zacks Rank # 5 (Strong Selling) which is one of the world’s leading manufacturers and distributors of batteries and lighting products. The company is also a leading designer and marketer of automotive air conditioning refill, appearance and fragrance products.
– Zacks
The stock has underperformed throughout the year and with estimates to the downside, investors are concerned that the 2021 lows will be removed before the end of the year.
About the company
Energizer is headquartered in Saint Louis, MO and employs 6,000 people. The company distributes products to consumers through various retail locations around the world, including mass merchandisers and warehousing clubs, food, drug and convenience stores, electronics specialty stores and department stores, hardware and automotive centers, e-commerce and military stores.
Energizer consists of three segments, with batteries accounting for 75% of fiscal year 21 revenue. Auto Care is 20% and Lights and Licensing is 5%. The company obtained 71% of its income in America and 29% in international operations.
ENR is valued at $ 2.5 billion and has a forward PE of 12. The company has a Zacks-style score of “A” for value and growth.
Fourth quarter results
Energizer reported earnings in early November, an improvement of 10%. This was the fourth beat in a row, but the stock keeps going down. Once, the reason for the recent sale was weak guidance for fiscal year 22.
The company sees fiscal year 22 at $ 3.00-3.30 versus the expected $ 3.51 and sees organic revenue unchanged year-over-year. The gross margin sees headwinds due to inflation that could affect margins by 150 basis points.
Margins are already down 70 basis points yoy and organic revenue is down 5.8% yoy.
Management expects demand to normalize in 2022, but also expects inflationary pressures to continue.
Dear
Margins are hurting earnings and estimates are being cut across the board. For the current quarter, estimates have fallen 15% over the past 60 days, from $ 1.11 to $ 0.94. For the current year, we see an 8% drop during that same time frame.
While value investors may start looking at the name, they may want to wait until inflation woes start to fade.
Technical take
Energizer is down 25% from the 2021 highs and just a couple of points below the recent lows. The stock remains slightly below its 50-day moving average and until the bulls can break above the $ 40 level again, it looks like dead money.
If momentum can be reversed, look for the 200 days at $ 42 as the next resistance.
If the stock breaks to the downside, the $ 35 level could offer support. Otherwise, the $ 25 minimum of COVID would likely be a landmark.
In summary
Energizer is a popular brand, but the business is hit by inflationary pressures. Until the trend changes, there are better places for investors to put their money.
Biotech Stock Breakdown With Triple Digit Earning Potential
The biotech sector is projected to grow beyond $ 2.4 trillion by 2028 as scientists develop treatments for thousands of diseases. They are also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks just launched Century of Biology: 7 Biotech Stocks to Buy Right Now to Help Investors Profit from 7 Stocks Ready to Outperform. Recommendations from previous editions of this report have produced gains of + 205%, + 258%, and + 477%. The actions in this report could work even better.
See these 7 innovative actions now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download the 7 best stocks for the next 30 days. Click to get this free report
Energizer Holdings, Inc. (ENR): Free Stock Analysis Report
To read this article on Zacks.com, click here.
Zacks Investment Research
.