Energizer Holdings (ENR) fourth-quarter results missed Zacks Consensus Estimates due to lower sales in Household Products and an adverse currency impact. The company expects growth in earnings for fiscal 2010 driven by continued reduction in overhead costs.
The company stands to benefit from restructuring initiatives, product innovations, strong cash flow and increased debt repayment. However, weaker margins, a delay in stock buybacks, intense competition, a sluggish battery business and increased marketing spending are potential negatives.
We downgrade the stock to Underperform as the company has been hit hard by the global economic crisis, leading to weak demand and prices for its battery business. We expect the negative impact of the economic downturn to continue in the near term. Our six-month price target is lowered to $54.00.Zacks Investment Research
