Energizer shares up on battery sales

The Associated Press

Shares of Energizer Holdings Inc. rose in trading Friday as the battery maker is expected to see a sales boost from shoppers stocking up on supplies for Hurricane Irene.THE SPARK: Hurricane Irene has residents along the East Coast preparing for possible disaster and storms, which includes snapping up batteries to power radios, flashlights and other equipment in case of power outages.Energizer makes an array of batteries, flashlights and other related products. The company holds a roughly 38 percent market share of the total battery business in the U.S., according to Citi Investment Research analyst Wendy Nicholson. She estimates batteries represent roughly 25 percent of the St. Louis company's total sales.THE ANALYSIS: As far as hurricanes go, Hurricane Irene is the best kind for companies like Energizer, Nicholson said in a note Friday.Hurricanes that come on shore and quickly dissipate, as often seen from those in the Gulf of Mexico, have a minimal impact on battery category sales. A hurricane that travels up the Eastern Seaboard creates a bigger group of people preparing for or potentially actually affected by a hurricane. Nicholson said that with Irene, given the heavy population density of the Northeastern U.S., she suspects the boost to category sales could be meaningful. However, if power outages are limited in scope, pantries would still be stocked, potentially putting pressure on sales the next quarter.Nicholson trimmed her price target on the stock, to $86 from $95, because of a lower market multiple.SHARE ACTION: Shares of Energizer rose $1.99, nearly 3 percent, to $75.62 in afternoon trading.