Oppenheimer analyst Ian Zaffino downgraded Spectrum Brands Holdings (SPB) to Hold today. The company’s shares closed on Friday at $59.35, close to its 52-week low of $57.34.
Zaffino observed:
“Hurt by weakness across most key business units, Spectrum’s F4Q18 EBITDA of $134.1M missed our/Street’s $180M/$175M estimates and implied guidance midpoint of ~$181M. Last week’s decision to end the sale process of Appliances was disappointing; as it reintroduces a very low-margin business and one that is at risk to Chinese tariff risks and online sales. On a positive note, the surprise divestiture of GAC drives gross leverage down to ~3.5x, vs. 5.8x currently. Guidance for FY19 EBITDA was much lower than expectations—e.g., $560M-$580M, vs. our $650M for the business ex-GAC and Batteries. Lower F2019E EBITDA to $570M from $630M. Given the operational challenges, the failed sale of Appliances and uncertain outlook, we move to Perform from Outperform.”
According to TipRanks.com, Zaffino is a 3-star analyst with an average return of 0.7% and a 50.1% success rate. Zaffino covers the Services sector, focusing on stocks such as Servicemaster Global Holdings, Wyndham Hotels & Resorts Inc, and Wyndham Destinations Inc.
Currently, the analyst consensus on Spectrum Brands Holdings is a Moderate Buy with an average price target of $82.67, a 39.3% upside from current levels. In a report issued on November 15, Wells Fargo also maintained a Hold rating on the stock with a $70 price target.
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Spectrum Brands Holdings’ market cap is currently $511.1M and has a P/E ratio of 0.70. The company has a Price to Book ratio of 0.49.
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Spectrum Brands Holdings, Inc. engages in the manufacture of diversified consumer products. It produces consumer batteries; residential locksets; residential builders’ hardware; plumbing, shaving, and grooming products; personal care products; small household appliances; specialty pet supplies; lawn and garden and home pest control products; personal insect repellents; and auto care products. The firm offers a portfolio of brands including Rayovac, VARTA, Kwikset, Weiser, Baldwin, National Hardware, Pfister, Remington, George Foreman, Black + Decker, Tetra, Marineland, Nature’s Miracle, Dingo, 8-in-1, FURminator, IAMS and Eukanuba, Healthy-Hide, Digest-eeze, Littermaid, Spectracide, Cutter, Repel, Hot Shot, Black Flag, Liquid Fence, Armor All, STP, and A/C PRO. The company was founded on July 13, 2018 and is headquartered in Middleton, WI.
