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Concerning Nielsen Data Prompts JPMorgan Downgrade Of Energizer Holdings

Jayson Derrick

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.

The Analyst

Andrea Teixeira downgraded Energizer Holdings from Neutral to Underweight with a price target lowered from $45 to $36.

The Thesis

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.

Price Action

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. 

Related Links:

10 Biggest Price Target Changes For Wednesday

Benzinga's Top Upgrades, Downgrades For June 19, 2019

Latest Ratings for ENR

Date Firm Action From To
Jun 2019 Downgrades Neutral Underweight
May 2019 Upgrades Neutral Buy
Apr 2019 Upgrades Neutral Buy

View More Analyst Ratings for ENR
View the Latest Analyst Ratings

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