UPDATE: BMO Capital Markets Reiterates Market Perform Rating, Raises PT on Energizer Holdings
In a report published Wednesday, BMO Capital Markets reiterated its Market Perform rating on Energizer Holdings (NYSE: ENR), and raised its price target from $78.00 to $83.00.
BMO Capital noted, “ENR's restructuring plan is bigger than we'd expected as it seeks a leanercost profile in the decelerating battery category. Estimated costs of $215-$245 million should produce pretax savings of $175-$200 million; ENR expects to drop 70%-80% of the savings to earnings (implying EPS of $1.50) and to reinvest the balance. After a modest impact in FY2H13, the EPS benefit should build in FY2014 and be fully realized in FY2015. ENR changed compensation, adding three new long-term metrics (cumulativeEBITDA, ROIC, and relative TSR); short-term metrics include adjusted EPS, operating profit, cost savings, and working capital as a percentage of sales. ENR also reaffirmed FY2012 EPS of $6.00-$6.20. Details will be provided on the 4Q call on November 9. We like the breadth of the plan, but will wait for a better opportunity as there is very little growth until 2HFY2013.”
Energizer Holdings closed on Tuesday at $75.22.
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