Stock Analysis & Ideas

Can Energizer Stock (NYSE:ENR) Keep Going and Going amid Strong Earnings?

Story Highlights

Energizer Holdings is higher today following its earnings report, and a souring macroeconomic picture could prove valuable for the battery giant.

Energizer Holdings (NYSE:ENR) made a name for itself on long-lived batteries and drum-playing bunnies that just kept going and going. Can the stock do likewise? ENR is rallying today after releasing Fiscal Q4 earnings. The company posted earnings of $0.82 per share. That was quite sufficient to beat TipRanks’ projections that called for $0.78 per share. It also exceeded last year’s earnings per share of $0.79. Revenue proved a beat as well; it came in at $790.4 million for the quarter – sufficient to beat estimates by 2.16%. Lastly, it readily beat revenue from a year ago, which came in at $766 million. I’m bullish on Energizer Holdings.

While Energizer will be prey to macroeconomic issues ahead, it’s got a clear advantage that will allow it to carry on even through the downtimes with minimal trouble. Everyone needs batteries, and Energizer provides them.

Is Energizer Holdings Stock a Buy, According to Analysts?

Turning to Wall Street, Energizer Holdings has a Moderate Buy consensus rating. That’s based on two Buys and four Holds assigned in the past three months. The average Energizer Holdings price target of $32.67 implies 3% upside potential. Analyst price targets range from a low of $27 per share to a high of $45 per share.

Meanwhile, Energizer Holdings has an 8 out of 10 Smart Score on TipRanks. This implies that Energizer will likely do better than the broader market.

There’s good reason to be positive, too. The company has posted increases in revenue in its last two quarters, going from $685.4 million in Q1 to $728 million in Q2. Then, the company’s revenue reached the aforementioned $790.4 million.

Living Up to Its Tagline

Energizer’s marketing tagline for years has been that it keeps going and going and going. In 2016, the company pivoted only slightly to “Still going.” This may be terser but is no less descriptive of the company’s longevity. It even calls back to the original tagline.

Yet, even a company with the kind of demonstrated longevity that Energizer has established over the years can see trouble in a down economy. Reports note that energizer officials refer to the current environment as “a volatile operating environment with significant headwinds.”

However, even in such an environment, there’s a potential win for Energizer. Consumers may switch over to a “nesting” trend that would produce results somewhat similar to what we saw in the COVID-19 lockdowns, though to a lesser extent.

In a “nesting” situation, customers stay home more and also don’t sell their homes. The recent turnaround in the housing market may help on that front as well.

This gives Energizer a boost, as most of Energizer’s uses are around the house. There’s little call for AA batteries when you’re going out to dinner or dancing. Meanwhile, homebodies frequently call for such batteries in their remote controls and other appliances. A situation of large-scale economic headwinds might actually work in Energizer’s favor.

Better yet, Energizer is actively future-proofing its operations. The company has a major portion of the wireless charging market, which was valued at $4.5 billion in 2021 and is set to grow to $17.4 billion by 2030.

Conclusion: (Probably) Still Going

Energizer’s tagline shift a few years back to “Still Going” does reflect well on the company’s overall path. While certainly, it hasn’t always been uphill, the company still continues to produce a very necessary product. Producing necessities goes a long way toward protecting a company during an economic downturn. Energizer might lose out a bit to customers buying somewhat cheaper batteries. However, this is likely to prove a negligible loss.

Thus, with the macroeconomic picture souring and Energizer likely to come into its own as a result, I’m bullish on the company. It’s hard to do things without batteries, and Energizer has customers covered.

Disclosure

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