We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Spectrum Brands (SPB) Up 17% in 3 Months: Will It Sustain in 2021?
Read MoreHide Full Article
Although demand and supply-related disruptions stemming from the pandemic impacted most of the companies, Spectrum Brands, Inc. (SPB - Free Report) has managed to remain resilient. Notably, shares of this Zacks Rank #2 (Buy) company have rallied 17% in the past three months compared with the industry’s growth of 3.4%. The stock’s bullish run on the bourses can be attributable to better-than-expected results in fourth-quarter fiscal 2020. Further, the bottom line gained from positive product mix, favorable volumes and productivity.
Moreover, management noted that fiscal 2021 started on a solid note on the back of continued demand. As a result, it issued upbeat guidance for fiscal 2021, wherein net sales are anticipated to grow 3-5% with favorable currency impact. Adjusted EBITDA is expected to rise in mid-single digits.
Apart from these, the company is progressing well with its Global Productivity Improvement Plan (“GPIP”), which aims to improve its operating efficiency and effectiveness, while focusing on consumer insights and growth-enabling functions, including technology, marketing, and research and development. Gains from this plan contributed to Spectrum Brands’ fourth-quarter fiscal 2020 results. Encouragingly, the company raised its savings target for the global productivity improvement plan to $100-$150 million. The majority of these savings are expected to be reinvested into the growth initiatives and consumer insights, R&D, and marketing across each of the businesses.
Additionally, strength in Global Pet Care Business acts as a key growth driver. In the fiscal fourth quarter, sales for the Global Pet Care business improved 21.6%, driven by growth in aquatic and companion animal categories. Further, strong e-commerce sales along with a spike in demand for aquatics, and reptile kits and equipment contributed to the segment’s growth.
Also, the company is on track with its plans to tap into the aquatics and reptile space. In this context, Spectrum Brands is progressing well with the integration process of its newly acquired Omega Sea, which is now part of its Global Pet Care portfolio of aquatic brands. Moreover, the company is making efforts to strengthen its leadership in the dog chews category via the acquisition of Armitage Pet Care. Cumulatively, the pet segment remains poised for growth, backed by its pipeline of robust innovation and growth strategy.
Wrapping Up
We believe that Spectrum Brands remains well-positioned to continue its momentum in 2021, driven by robust demand in the pet segment, contributions from the global productivity improvement plan and a positive fiscal 2021 view. Notably, the Zacks Consensus Estimate for fiscal 2021 is pegged at $4.96, reflecting a 13.2% increase in the past 30 days.Topping it, a VGM Score of B and a long-term earnings growth rate of 18.3% support the Zacks Rank for the stock.
Crocs (CROX - Free Report) has a long-term earnings growth rate of 15% and it presently sports a Zacks Rank #1.
Deckers Outdoor Corporation (DECK - Free Report) currently has a long-term earnings growth rate of 18.6% and a Zacks Rank #2.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Shutterstock
Spectrum Brands (SPB) Up 17% in 3 Months: Will It Sustain in 2021?
Although demand and supply-related disruptions stemming from the pandemic impacted most of the companies, Spectrum Brands, Inc. (SPB - Free Report) has managed to remain resilient. Notably, shares of this Zacks Rank #2 (Buy) company have rallied 17% in the past three months compared with the industry’s growth of 3.4%. The stock’s bullish run on the bourses can be attributable to better-than-expected results in fourth-quarter fiscal 2020. Further, the bottom line gained from positive product mix, favorable volumes and productivity.
Moreover, management noted that fiscal 2021 started on a solid note on the back of continued demand. As a result, it issued upbeat guidance for fiscal 2021, wherein net sales are anticipated to grow 3-5% with favorable currency impact. Adjusted EBITDA is expected to rise in mid-single digits.
Apart from these, the company is progressing well with its Global Productivity Improvement Plan (“GPIP”), which aims to improve its operating efficiency and effectiveness, while focusing on consumer insights and growth-enabling functions, including technology, marketing, and research and development. Gains from this plan contributed to Spectrum Brands’ fourth-quarter fiscal 2020 results. Encouragingly, the company raised its savings target for the global productivity improvement plan to $100-$150 million. The majority of these savings are expected to be reinvested into the growth initiatives and consumer insights, R&D, and marketing across each of the businesses.
Additionally, strength in Global Pet Care Business acts as a key growth driver. In the fiscal fourth quarter, sales for the Global Pet Care business improved 21.6%, driven by growth in aquatic and companion animal categories. Further, strong e-commerce sales along with a spike in demand for aquatics, and reptile kits and equipment contributed to the segment’s growth.
Also, the company is on track with its plans to tap into the aquatics and reptile space. In this context, Spectrum Brands is progressing well with the integration process of its newly acquired Omega Sea, which is now part of its Global Pet Care portfolio of aquatic brands. Moreover, the company is making efforts to strengthen its leadership in the dog chews category via the acquisition of Armitage Pet Care. Cumulatively, the pet segment remains poised for growth, backed by its pipeline of robust innovation and growth strategy.
Wrapping Up
We believe that Spectrum Brands remains well-positioned to continue its momentum in 2021, driven by robust demand in the pet segment, contributions from the global productivity improvement plan and a positive fiscal 2021 view. Notably, the Zacks Consensus Estimate for fiscal 2021 is pegged at $4.96, reflecting a 13.2% increase in the past 30 days.Topping it, a VGM Score of B and a long-term earnings growth rate of 18.3% support the Zacks Rank for the stock.
Other Stocks to Consider
Whirlpool Corporation (WHR - Free Report) has a long-term earnings growth rate of 7.3%. Currently, it flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Crocs (CROX - Free Report) has a long-term earnings growth rate of 15% and it presently sports a Zacks Rank #1.
Deckers Outdoor Corporation (DECK - Free Report) currently has a long-term earnings growth rate of 18.6% and a Zacks Rank #2.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>