UPDATE: Deutsche Bank Upgrades Energizer (ENR) to Buy; Favorable Risk/Reward

January 4, 2018 6:00 AM EST
Get Alerts ENR Hot Sheet
Price: $32.32 +1.54%

Rating Summary:
    8 Buy, 12 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 8 | Down: 40 | New: 22
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(Updated - January 4, 2018 6:48 AM EST)

(updated with analyst comments)

Deutsche Bank upgraded Energizer (NYSE: ENR) from Hold to Buy with a price target of $58.00 (from $50.00). The analyst sees favorable risk/reward at current levels.

Analyst Faiza Alwy commented, "We have been concerned about ENR's growth prospects for most of this year as
the company lapped distribution gains and AmazonBasics batteries seemed to gain more traction. We are now more constructive on the story as: (i) our channel checks indicate superior retail (and online) execution; (ii) favorable competitive dynamics noting Duracell's lack of focus, recent supply chain issues at Amazon, and disruption at Rayovac following news that Spectrum is exploring strategic alternatives; (iii) the company is an underappreciated beneficiary of US tax reform with most of its cash trapped overseas; and (iv) upside from strategic optionality, noting ENR is the most logical strategic buyer for Spectrum Brands' battery business, and we believe anti-trust issues could be overcome given easily accessible battery capacity in Asia. Our base case model assumes overseas cash is redeployed for share buybacks over the course of FY18 and FY19, and our $58 PT is DCF-derived, implying 7.4% FCF yield on CY18."

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 $48.40 yesterday.

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