- If you are wondering whether Energizer Holdings at around US$17.24 still offers value or has already priced in its risks, this breakdown will help you frame that question clearly.
- The stock has seen a 2.3% return over the last 7 days, against a 24.0% decline over 30 days and a 38.9% decline over the last year, which can change how the market views both its potential and its risk.
- Recent coverage has focused on Energizer Holdings as a long standing player in household products, with attention on how it is positioned in batteries and related categories in a competitive market. That backdrop is important context when you look at a share price that is lower over 1, 3 and 5 years and ask whether valuation now looks more appealing or reflects structural concerns.
- On Simply Wall St's valuation checks, Energizer Holdings currently scores 5 out of 6. The rest of this article will walk through what that means across different valuation methods, before finishing with a way to assess valuation that goes beyond any single model.
Find out why Energizer Holdings's -38.9% return over the last year is lagging behind its peers.
Approach 1: Energizer Holdings Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model estimates what a business could be worth today by projecting its future cash flows and then discounting those back to a present value using a required rate of return.
For Energizer Holdings, the model used is a 2 Stage Free Cash Flow to Equity approach. It is based on Free Cash Flow to Equity of about $133.0 million over the last twelve months. Analyst and extrapolated projections point to Free Cash Flow of $526 million in 2026 and $361 million in 2030, with the years in between and beyond filled in using Simply Wall St's extended forecasts.
Aggregating these discounted cash flows produces an estimated intrinsic value of $94.74 per share. Compared with the recent share price of about $17.24, this implies an intrinsic discount of 81.8%. On this particular cash flow model, Energizer Holdings appears heavily undervalued.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Energizer Holdings is undervalued by 81.8%. Track this in your watchlist or portfolio, or discover 61 more high quality undervalued stocks.
Approach 2: Energizer Holdings Price vs Earnings
For companies that are generating profits, the P/E ratio is a useful way to connect what you pay for each share with the earnings that support that price. In general, higher growth expectations or lower perceived risk can justify a higher P/E, while lower growth or higher risk can point to a lower, more cautious “normal” multiple.
Energizer Holdings currently trades on a P/E of 5.53x. That sits well below the Household Products industry average P/E of 16.50x and also below the peer group average of 20.19x. To go a step further, Simply Wall St calculates a proprietary “Fair Ratio” of 13.03x for Energizer Holdings. This Fair Ratio is designed to reflect what a more tailored P/E might look like given the company’s earnings growth profile, its industry, profit margins, market cap and specific risks.
Because the Fair Ratio incorporates these company specific drivers, it can be more informative for you than a simple comparison with broad industry or peer averages. Setting this Fair Ratio of 13.03x against the current P/E of 5.53x suggests the market price is below what that framework implies.
Result: UNDERVALUED
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Upgrade Your Decision Making: Choose your Energizer Holdings Narrative
Earlier it was mentioned that there is an even better way to understand valuation, so this is where Narratives come in as a simple way to connect your view of Energizer Holdings with the numbers behind it.
A Narrative is your story about the company, written in financial terms, where you outline what you think is reasonable for future revenue, earnings and margins, and then link that to a fair value estimate that sits behind the current valuation checks.
On Simply Wall St’s Community page, Narratives are presented as an easy tool where millions of investors can set assumptions, see the forecast that flows from them and compare the resulting Fair Value to the current share price to help decide whether they see Energizer Holdings as priced attractively or not.
Because Narratives are refreshed when new information such as news or earnings is added, your fair value view is not static, and for Energizer Holdings you might see one Narrative that assumes a relatively high fair value and another that points to a much lower figure, which shows how different investors can read the same company in very different ways.
Do you think there's more to the story for Energizer Holdings? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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