Shares of Energizer (NYSE:ENR), the well-known battery manufacturer, experienced an 8% drop intra-day today, following downgrades by several brokerage firms.
Morgan Stanley downgraded Energizer’s rating to Underweight. The firm cited concerns about “lower visibility” and increasing risks to the company’s revenue. The analysts also expressed doubts about Energizer’s ability to grow its organic sales growth over time. They pointed out potential challenges in maintaining pricing power in the battery sector and the risk of declining consumer demand in some of Energizer’s semi-discretionary product categories compared to its consumer packaged goods (CPG) peers.
Meanwhile, RBC Capital Markets described Energizer’s financial year 2024 guidance as “tepid.” The analysts adjusted the firm’s stance on Energizer to Sector Perform from Outperform, setting a price target of $38 per share. The analysts’ rationale for the downgrade was based on combining the company’s new, lower earnings estimates with the recent rally in its stock price, leading to the conclusion that the stock is now approximating fair value.
These downgrades and cautious outlooks came after Energizer issued full-year adjusted earnings per share guidance that fell below the consensus expectations of Wall Street analysts.