BMO Capital Questions attractiveness Energizer (ENR) Batteries and Personal Care Businesses; PT to $137

BMO Capital analyst Connie Maneaty raised her price target on Energizer (NYSE: ENR) to $137.00 (from $125.00) but maintained a Market Perform rating as they are questioning the attractiveness of ENR’s batteries and personal care businesses based on the Energizer SpinCo Form 10 released on February 6, management's presentations of Energizer Holdings (ENR) and Edgewell Personal Care (EPC) at CAGNY on February 20, and the most recent market share data released on February 24.

Maneaty commented, "Form 10 offers a fair representation of ENR SpinCo geographic sales and operating profit and margins between 2011 and 2014. North American sales declined at a CAGR of 7% on the loss of Sam's Club and Family Dollar; ROW organic sales declined 1% annually on the secular slowdown in category growth. ENR SpinCo operating margin is healthy and grew 180 bp to 24.4% as a result of the restructuring. Personal care market shares have been under pressure since 2010; shares rose only in razor blades (up 130 bp to 33.3%). Shares of disposable razors fell 680 bp to 18.6% and Schick lost its #2 spot to BIC; shave preps fell 830 bp to 34.5%; suncare slipped 80 bp to 25.4%; tampon share fell 290 bp to 22.2%. Shares of sanitary pad/liners, acquired from Johnson & Johnson in 2013, are off 90 bp to 14.7%. The share declines raise questions: did ENR fund Hydro to the detriment of everything else? Are they the result of the ParentCo corporate structure? Will they revive as part of Edgewell? Or would they be better off in an entirely new organization?"

For an analyst ratings summary and ratings history on Energizer click here. For more ratings news on Energizer click here.

Shares of Energizer closed at $136.52 yesterday.

You May Also Be Interested In

• QuantumScape (QS) PT Lowered to $6 at Truist Securities
• Yageo Corp. (2327:TT) (YAGOY) PT Lowered to NT$656 at HSBC
• BMO Capital Reiterates Outperform Rating on National Health Investors (NHI)