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We expect battery and personal care products manufacturer, Energizer Holdings Inc. (ENR - Analyst Report) to beat expectations when it reports third quarter 2014 results on Jul 30.

Why a Likely Positive Surprise?

Our proven model shows that Energizer is likely to beat earnings because it has the right combination of two key ingredients.

Positive Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at +1.29%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares.

Zacks Rank #3 (Hold): Note that stocks with Zacks Ranks of #1, #2 and #3 have a significantly higher chance of beating earnings. The sell rated stocks (#4 and #5) should never be considered going into an earnings announcement.  

The combination of Energizer’s Zacks Rank #3 and +1.29% ESP makes us very confident in looking for a positive earnings beat on Jul 30.

What is Driving the Better-Than-Expected Earnings?

We believe that product innovations coupled with higher pricing of Energizer’s household products and restructuring initiatives would positively impact its results, going forward.

Moreover, its prudent product mix would expand margins in the near term. Also, the company’s partnership with Unilever’s AXE brand is expected to result in market share gains, going forward. This apart, the acquisition strategy of the company is expected to reap benefits.

However, the expected decline in volumes in the Household Product segment, unfavorable foreign exchange and increasing competition from companies such as Kimberley-Clark Corp. and Procter & Gamble Co. are the near-term headwinds.

Other Stocks to Consider

Energizer is not the only firm looking up this earnings season. We also see likely earnings beats coming from these 3 companies:

Synaptics Inc (SYNA - Snapshot Report), Earnings ESP of +4.07% and Zacks Rank #1 (Strong Buy).

Western Digital Corporation (WDC - Analyst Report), Earnings ESP of +4.02% and Zacks Rank #2 (Buy).

Iron Mountain Inc. (IRM - Analyst Report), Earnings ESP of +12.82% and Zacks Rank #2 (Buy).

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