What Happened?
Shares of battery and lighting company Energizer (NYSE: ENR) fell 5.2% in the afternoon session after the company completed the sale of $400 million in Senior Notes due 2033.
This involved issuing new debt with a 6.000% annual interest rate. Energizer planned to use the funds to pay off older notes that were due in 2027, reduce borrowings on its revolving credit line, and for general company costs. While the action was part of a strategy to manage its debt, taking on new long-term debt often makes investors wary. The move changes the company's credit structure and financial duties, and the market's reaction suggests concern about the increased debt load and future interest payments.
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What Is The Market Telling Us
Energizer’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was about 2 months ago when the stock gained 24.6% on the news that the company reported third-quarter results that significantly beat analyst expectations and raised its full-year financial outlook.
The battery maker posted adjusted earnings of $1.13 per share, which demolished analyst estimates of around $0.62. Revenue also grew 3.4% to $725.3 million, beating Wall Street forecasts. The strong performance stemmed from a company initiative called "Project Momentum," which improved margins and operational efficiency. Energizer's adjusted gross margin improved to 44.8% from 41.5% a year ago. Following these results, the company raised its full-year guidance, forecasting adjusted earnings between $3.55 and $3.65 per share and adjusted EBITDA from $630 million to $640 million.
Energizer is down 24.4% since the beginning of the year, and at $26.15 per share, it is trading 33.6% below its 52-week high of $39.39 from December 2024. Investors who bought $1,000 worth of Energizer’s shares 5 years ago would now be looking at an investment worth $667.09.
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