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On Thursday, BTIG analysts maintained a Neutral rating on shares of EnerSys (NYSE:ENS) following the company’s fiscal third-quarter earnings report. EnerSys, a global leader in stored energy solutions for industrial applications, announced adjusted earnings per share (EPS) of approximately $3.12, excluding roughly $0.24 of one-time items. This figure surpassed the consensus estimate of about $2.70. However, revenue fell short by approximately 3%, totaling around $906 million against expectations of roughly $932 million. The revenue shortfall was attributed to disruptions at a Motive Power customer’s plant, which led to deferred revenue. Trading at a P/E ratio of 13.4x and showing strong profitability metrics according to InvestingPro data, the company appears undervalued compared to its Fair Value.
The stock experienced a sell-off after the market closed on Wednesday but stabilized on Thursday. Company management provided some reassurance by indicating that the U.S. communications and transportation segment, which had been underperforming, appears to be reaching a turning point. InvestingPro analysis reveals strong fundamentals, with a current ratio of 2.97x and moderate debt levels, suggesting solid financial health. Three analysts have recently revised their earnings estimates upward, with price targets ranging from $104 to $121.
In December, EnerSys had raised its adjusted EPS guidance for the quarter to $3.00-$3.10, up from the previous range of $2.20-$2.30, citing incremental benefits from the Advanced Manufacturing Production Credit included in the Inflation Reduction Act (IRA). Analysts had not fully updated their forecasts to reflect this new guidance, which may have contributed to the earnings beat.
During the earnings call, the company further increased its adjusted EPS guidance for fiscal year 2025 to $9.97-$10.07, up from the $9.65-$9.95 range provided in December. This updated guidance reflects anticipated annual tax credit benefits ranging from $135 million to $175 million, demonstrating EnerSys’s ability to capitalize on favorable legislative changes.
In other recent news, EnerSys, an industrial energy storage solutions provider, has secured a $199 million award from the U.S. Department of Energy to support the construction of a new lithium-ion battery manufacturing facility in Greenville, South Carolina. The facility, expected to start commercial production in 2028, is designed to produce advanced lithium-ion cells for a range of critical applications, including commercial, industrial, and defense sectors. This development aligns with EnerSys’s broader portfolio and its commitment to sustainability and minimizing its environmental footprint.
In another development, Oppenheimer analysts have upgraded EnerSys stock from Perform to Outperform, setting a new price target of $115.00. The upgrade reflects a positive outlook on several factors influencing the company’s performance, including a brighter telecom capital expenditure forecast, clarity regarding management transitions, and progress on internal margin levers and strategic initiatives. The analysts believe that EnerSys has a high likelihood of surpassing earnings per share expectations for the December quarter and anticipate upward revisions for fiscal years 2025-2026.
Furthermore, EnerSys reported its second-quarter fiscal 2025 earnings, delivering results that aligned with its guidance. The company announced CEO David Shaffer’s planned retirement in May 2025, with Shawn O’Connell, currently the President of Energy Systems Global, set to take the helm as the new CEO. Despite challenges in sectors like the Class 8 truck market, EnerSys secured a substantial Department of Energy award for a lithium giga factory and remains optimistic about future opportunities.
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