ENERGIZER HOLDINGS, INC. (ENR): what the price requires

At today's price, ENERGIZER HOLDINGS, INC. (ENR) is priced for +2.7% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-19 · Source: https://boothcheck.com/report/ENR

Headline

FieldValue
TickerENR
CompanyENERGIZER HOLDINGS, INC.
Current price$20.42/sh
CompositionNorth America 56% / Modern Markets 17% / Developing Markets 11% / Distributor Markets 7% / Global Professional 10%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin needed4.1%
Operating margin today7.7%
Margin compression implied-3.6pp
Implied growth2.7%
Multiple paid22x operating income

The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.

Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~8.4pp (computed at the 7% minimum rate; the CAPM rate 5.1% sits below it).

Reconcile: at the x-ray's 9.3% required return this reads ~19.8%/yr; the models below use their own rates.

How unusual the bet is: within-range

ReferenceValue
vs own history-0.32σ
cohort percentile (of 225 peers)52
implied end-window share0%

Valuation X-Ray

The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset0.53x4justifies
Earnings0.46x2justifies
Relative0.21x4justifies
Growth0.74x3justifies

Families that justify the price: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 3.1%); the inversion above states its own rate.

Per-Model Detail (n=13)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth——no—
DCF Exit MultipleGrowth$27.700.74xyesExit EV/EBITDA: 46.6x / 48.6x / 50.6x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative$39.700.51xyesP/E 13.69x (blended: static sector reference 18x + trailing (TTM) 7x), scenarios: 11.6x / 13.7x / 15.8x (bear / base = reference held flat / bull), EV/EBITDA 22.98x
Simple DDMGrowth——no—
Two-Stage DDMGrowth$42.290.48xyesStage 1: 20% for 5yr, Stage 2: 3.5% perpetual
Simple Excess ReturnAsset$30.520.67xyesBV/sh $2.51, ROE (TTM) 112.6%, ke 9.3%
Two-Stage Excess ReturnAsset$260.300.08xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$14.391.42xyesRev $3.0B, growth 3% (input: historical growth; tapered), Terminal P/S: 0.4x / 0.5x / 0.5x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$95.200.21xyesEPS $2.72, growth 35% (input: historical EPS growth), PEG=0.21 (Undervalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings——no—
Residual IncomeAsset$51.780.39xyesBV $2.51 + 5yr PV of (ROE (TTM) 112.6% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$12.391.65xyes√(22.5 × EPS $2.72 × BVPS $2.51) — Graham's conservative floor
EV/EBITDA RelativeRelative$0.012042.00xyesEBITDA $0.10B × sector EV/EBITDA 12.0x (excluded from median)
FCF YieldEarnings$0.012042.00xyesFCF $159.4M / Kₑ 9.3% — zero-growth perpetuity (excluded from median)
SBC-Adj FCF YieldEarnings$0.012042.00xyesSBC-adj FCF $0.13B (FCF $0.16B − SBC $0.03B) capitalized at Kₑ (excluded from median)
Ben Graham FormulaEarnings$87.770.23xyesEPS $2.72 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative$107.830.19xyesRevenue $2.98B × sector P/S 2.5x
PEG Fair ValueRelative$102.000.20xyesEPS $2.72 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings YieldEarnings$29.410.69xyesEPS $2.72 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$3.3b
Net debt / NOPAT (after-tax)32.97x
Net debt / operating income (pre-tax)15.34x
Interest coverage1.4x
Share count CAGR (buyback)-0.9%
Burning cashno

Bullet Takeaways

Bull Case

Read Energizer through its earnings trajectory and a more constructive picture emerges than the soft top line suggests. Net sales fell about 3 percent to $643.3 million in the fiscal second quarter, and organic sales were down roughly 5.5 percent on volume, yet adjusted EPS of $0.94 more than doubled the $0.46 consensus. That gap between declining revenue and beating earnings is the whole bull thesis: management is offsetting weak demand with pricing, supply-chain improvements, and cost structure, and the margin work is sticking. Adjusted gross margin reached 44.4 percent in the quarter, and management raised full-year adjusted EPS toward the high end of its $3.30 to $3.60 range and adjusted EBITDA toward the high end of $580 million to $610 million. A consumer-staples business defending earnings while volumes dip is doing exactly what a defensive name should.

The franchise underneath is durable. Energizer is one of two dominant brands in primary batteries, a product consumers buy on habit and brand recognition, and the company supplements it with an auto-care portfolio. The battery category is regaining its footing as a reliable consumer staple, and the demand softness this quarter was partly timing: a shift in battery order timing tied to a plastic-free packaging conversion, a slower start to the auto-care selling season, and modest Middle East conflict impacts. Those are transient, not structural. The brand strength shows in the returns: trailing ROE is extraordinary because the equity base is thin relative to the cash the brands generate.

The valuation is where the bull case sharpens. The dividend yields about 6 percent. The bull case is straightforward: a cheap, branded consumer staple with proven pricing power and a high dividend, where steady deleveraging over time shifts value from creditors to a small equity base and the multiple re-rates toward the value the methods suggest.

Bear Case

The bear case is about which assumptions the price actually depends on, and the most fragile one is that the leverage gets worked down before something goes wrong. The numbers are stark: net debt of about $3.34 billion sits at roughly five times EBITDA and more than fifteen times trailing operating income, against only $172.5 million of liquid assets and interest coverage of about 1.4 times. Book value per share is just $2.51, which is why the apparently spectacular return on equity is really a leverage artifact, not a sign of an unusually profitable business. The filing shows the company actively managing this debt, paying a premium on bond redemptions and using cash to repay the revolving facility (ENR FY2025 10-K, accession 0001632790-25-000091), but a balance sheet this stretched has almost no margin for an earnings disappointment. The equity is a thin sliver on top of a large, fixed creditor claim, and that structure is the dominant risk.

The second dependency is the quality of the earnings beat itself. The fiscal-second-quarter result leaned on a $47.6 million tariff-refund benefit that materially boosted adjusted gross margin and earnings, and that is a one-time item, not a recurring earnings stream. Management acknowledges that fourth-quarter margins must hold above 40 percent even after cycling the tariff-recovery benefits, which is to say the underlying margin without the refund is lower. Strip out the tariff windfall and the picture is a business with declining organic volume, a dilutive auto-care segment weighing on the mix, and pricing that can only stretch so far before it accelerates the volume decline. The price is leaning on continued margin gains that may not repeat once the one-time benefits roll off.

The third issue is that the growth simply is not there to grow into the leverage. Organic net sales fell roughly 5.5 percent, full-year organic growth is guided to roughly flat, and the battery and auto-care categories are mature, low-growth markets. The dividend at a 6 percent yield consumes cash that could otherwise pay down debt, so management is effectively choosing to reward equity holders while leverage stays elevated, a defensible choice only if demand stabilizes. The analyst community is unconvinced: the consensus is a hold with an average target near $20.67, below the current price, reflecting that the cheap multiple is cheap for a reason. The inversion band above the price assumes a recovery and deleveraging; the asset reality is a thinly capitalized, slow-growth staple where the difference between value and value trap is whether the debt comes down faster than the demand erodes.

Valuation

Energizer is one of the few names in this batch the model reads as value and asset-supported rather than a growth bet, with the price supported by asset, earnings-power, relative-multiple, and growth-DCF value simultaneously. On its face that says the stock is cheap; the question is why, and the answer is the balance sheet.

The X-ray is distorted by the extreme leverage, so the methods must be read with care. The relative-valuation method at about $40 on a blended 13.85 times P/E and the two-stage dividend model at $42 are the cleaner reads, both well above the price. The simple excess-return method at $30.52 and residual income near $52 reflect the tiny $2.51 book value and a 112.6 percent ROE that is purely a leverage effect, so the two-stage excess-return figure of $260 is a mathematical artifact, not a real value. The earnings-power value collapses to a penny because normalized five-year operating income is small. The discounted-future-market-cap method at $15.17 is the most sobering, applying a low sales multiple to a slow-growth top line.

The honest synthesis is that the multiple-based methods say the equity is undervalued and the balance-sheet reality says why it might deserve to be. The deciding variable is deleveraging: a company at five times EBITDA with thin coverage carries a discount for financial risk, and the equity re-rates toward the $40-plus methods only if net debt comes down and earnings hold. The one-time tariff benefit flatters the current numbers, and the dividend competes with debt paydown for cash. Buy it as a cheap, levered, branded staple if you believe demand stabilizes and the debt declines; the risk is that flat organic growth leaves the leverage stuck where it is.

Catalysts

The fiscal second-quarter 2026 report was the most recent catalyst and a strong beat on the surface. Net sales of $643.3 million fell about 3 percent, organic sales declined roughly 5.5 percent on a 6.1 percent volume drop, but adjusted EPS of $0.94 beat the $0.46 estimate by more than 100 percent, helped by an anticipated $47.6 million tariff-refund benefit. Management updated the full-year outlook to low-single-digit net sales growth, roughly flat organic, and adjusted EPS and EBITDA at the high end of the prior $3.30 to $3.60 and $580 million to $610 million ranges. The next print is the test of whether margins hold above 40 percent once the tariff-recovery benefit is cycled.

The dominant catalyst is deleveraging. With net leverage around five times EBITDA and interest coverage near 1.4 times, the pace of debt reduction is the swing factor for the equity, and management has been actively redeeming bonds and paying down the revolving facility. The volume drivers to watch are the recovery from the battery-order timing shift tied to plastic-free packaging, the auto-care selling season, and any further Middle East conflict impacts. The 6 percent dividend and its competition with debt paydown for cash is the capital-allocation tension. Analyst sentiment is cautious, with a hold consensus and an average target near $20.67, so a credible deleveraging trajectory or a demand inflection would be the catalyst to move sentiment.

Sources: StockTitan ENR Q2 2026 results, StockTitan outlook to high end, Yahoo Finance tariff refund benefit, StockAnalysis ENR forecast.

Peer Cohorts (Per Segment, With Filing Citations)

Batteries & Lights (reported)

Auto Care (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive ENR report on boothcheck