A bearish case for battery and portable lighting product maker company Energizer Holdings Inc (NYSE: ENR) can be made after recent Nielsen data pointed to a concerning outlook, according to JPMorgan.
Andrea Teixeira downgraded Energizer Holdings from Neutral to Underweight with a price target lowered from $45 to $36.
Data from Nielsen shows Energizer's acquired Rayovac battery business is deteriorating in the U.S., Teixeira said in a Wednesday note. (See her track record here.)
The brand saw shelf space losses and contracted 14.9% year-over-year for the 12-week period ended May 18, the analyst said.
This would mark an acceleration in shelf space loss, as prior Nielsen data found a 12% loss for the 12-week period ending March 23, Teixeira said.
The North American market accounts for an estimated 70% of Rayovac's total business and the concerning Nielsen data readout likely implies Rayovac's sell-through rate will remain pressured through the fiscal third quarter of 2020.
Aside from Nielsen data, Energizer faces an overhang risk from Spectrum Brand's 7.6% ownership stake in Energizer, with a lockup period expiring in January 2020.
JPMorgan lowered its 2019 EPS estimate for Energizer Holdings from $2.95 to $2.80.
The firm also lowered its EPS estimates for the next year from $3.31 to $2.97.
Energizer hit a new 52-week low of $38.31 Wednesday morning, and the stock was down 6.96% at $38.91 at the time of publication.
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