On Wednesday, Canaccord Genuity adjusted its price target for Energizer Holdings shares (NYSE:ENR) to $32 from $33, maintaining a Hold rating on the stock. The revision followed the company's second-quarter earnings report for 2024, which included sales that met consensus expectations and profitability metrics that exceeded them.
Energizer's adjusted gross profit and adjusted EBITDA surpassed analyst projections by approximately 3% and 4%, respectively. This performance led to an adjusted earnings per share (EPS) that was around 7% higher than anticipated.
The firm's analyst noted that Energizer's margin expansion was influenced by improving category trends and benefits from the company's Project Momentum. Despite the positive results, the company's full-year guidance was reiterated but now sits at the lower end of the previous range, particularly regarding organic sales growth, which has been challenging to achieve in recent quarters.
The report also highlighted that while the company has made distribution gains in both U.S. and international markets, the second half of the year's outcomes would likely depend on point-of-sale activity and product replenishment rates. In response to the guidance provided for a 1% increase in organic revenue in the third quarter and an indication of similar performance for the fourth quarter, Canaccord Genuity slightly reduced its top-line estimates for the second half of 2024.
The decision to lower the stock price target was primarily due to these modest estimate reductions. The Hold rating was reiterated as the firm continues to monitor Energizer's performance and market position.
InvestingPro Insights
Following Canaccord Genuity's price target adjustment for Energizer Holdings, a look into the real-time data from InvestingPro provides additional context on the company's financial health and market valuation. Energizer's market capitalization stands at $2.08 billion, with a promising adjusted P/E ratio of 12.05 for the last twelve months as of Q2 2024.
This figure indicates a company that is trading at a low price relative to its near-term earnings growth. Moreover, the company's PEG ratio during the same period is 0.18, suggesting potential undervaluation based on expected earnings growth.
The InvestingPro Tips highlight that Energizer is currently trading at a high Price/Book multiple of 10.87, which could be a point of consideration for investors looking at asset valuation. Additionally, analysts predict that the company will be profitable this year, which aligns with the reported profitability over the last twelve months.
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