Diversey Holdings, Ltd. (DSEY) delivered mixed second-quarter results aided by continued momentum in its Food & Beverage (F&B) business and a rebound in its base institutional business.
Diversey develops and delivers innovative products, services, and technologies that save lives and protect the environment. Following the results, shares jumped 3.9%, closing at $16.80 on August 13. (See Diversey stock charts on TipRanks)
Net sales for the quarter came in at $650.1 million, up 3.9% year-over-year, but missed analysts’ estimates of $666.7 million.
On a positive note, the company reported adjusted earnings of $0.16 per share, in line with the year-ago period, and surpassed the Street’s estimate of $0.14 per share.
Compared to the prior-year period, Diversey’s F&B business grew 15%. F&B business revenue was boosted by continued demand for its products, as well as a positive consumer response to its new water treatment offering.
Phil Wieland, the company’s CEO, said, “As a leading provider of hygiene, infection prevention and cleaning solutions amidst a pandemic, we believe we are well-positioned to capture significant growth due to elevated hygiene standards. Further, we are also well-positioned to continue helping customers save water, labor, energy, and waste as environmental impact becomes even more of a focus across industries.”
For the remainder of 2021, Diversey expects to witness sequential growth in the business driven by robust demand in its F&B segment for both its core business and the new water treatment portfolio. Moreover, the company sees a rebound in sales driven by higher vaccination rates and market re-openings.
Last month, Jefferies analyst Laurence Alexander assigned a Buy rating to the stock with a price target of $21, implying 25% upside potential to current levels.
Overall, the stock has a Moderate Buy consensus rating based on 2 Buys and 1 Hold. The average Diversey price target of $18.67 implies 11.1% upside potential to current levels. Shares have gained 12.2% since their listing on March 25, 2021.
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