Edgewell Personal Care stock rating upgraded by Morgan Stanley after hitting bottom

Investing.com - Morgan Stanley (NYSE:MS) upgraded Edgewell Personal Care (NYSE:EPC) from Underweight to Equalweight on Wednesday, while lowering its price target to $23.00 from $26.00. The stock currently trades at $20.29, with InvestingPro analysis indicating the company is undervalued based on its Fair Value model.

The upgrade follows a significant 19% stock drop after Edgewell’s third-quarter results missed expectations for organic sales growth, gross margins, and earnings per share, which also prompted the company to lower its full-year guidance. The stock has declined nearly 39% year-to-date, now trading near its 52-week low of $19.13.

Morgan Stanley believes the third quarter likely represents a bottom for organic sales growth, noting that while underlying pressure exists, the weakness was also influenced by timing and temporary issues.

The investment bank points to Edgewell’s compressed valuation, which has reached an all-time low of 6.7x CY26 EV/EBITDA, as a key factor in the rating change despite expectations that fiscal 2026 earnings growth will face pressure from incremental tariffs.

Edgewell stock has dropped approximately 40% year-to-date, underperforming the consumer staples sector by 4,200 basis points and the S&P 500 by 4,700 basis points, with its price-to-earnings multiple having been reduced by two-thirds since its 2015 split.

In other recent news, Edgewell Personal Care Co. reported its third-quarter earnings for 2025, revealing a shortfall in both earnings per share (EPS) and revenue compared to analysts’ projections. The company posted an EPS of $0.92, which was below the expected $1. Additionally, Edgewell generated revenue of $627.2 million, missing the anticipated $655.17 million. These results mark a significant development for the company, as they were unable to meet the financial benchmarks set by analysts. The earnings miss highlights challenges the company may be facing in achieving its financial targets. Investors and stakeholders are closely watching these developments for insights into the company’s performance. These recent developments are crucial for understanding the current financial standing of Edgewell Personal Care Co.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.