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On Thursday, Oppenheimer analysts adjusted their outlook on Spectrum Brands Holdings Inc . (NYSE: NYSE:SPB), reducing the price target from the previous $115.00 to $105.00. Despite the price target cut, the firm maintains an Outperform rating on the stock. According to InvestingPro analysis, Spectrum Brands appears undervalued at current levels, with the stock trading near its 52-week low of $77.92. The company maintains a "GOOD" overall financial health score, suggesting solid fundamental strength.
Spectrum Brands reported first quarter fiscal year 2025 earnings before interest, taxes, depreciation, and amortization (EBITDA) of $78 million, surpassing both Oppenheimer’s and the Street’s estimates of $61 million and $67 million, respectively. The company’s performance was bolstered by robust results in its Home & Garden (H&G) segment, which saw year-over-year growth of 28%, and steady growth in its Home & Personal Care (HPC) segment, with a 1% increase compared to the previous year.
The positive outcomes in H&G were attributed to seasonal inventory build-up and an extended fall selling season, while the HPC segment experienced growth in the personal care category and strength in e-commerce. However, the Global Pet Care (GPC) segment reported a 6% decline year-over-year, affected by a pull-forward of retailer orders in the fourth quarter of fiscal 2024 due to an upcoming ERP implementation and consumer trade-down effects.
Spectrum Brands’ revenue for the quarter stood at $700 million, which is in line with Oppenheimer’s and the Street’s projections of $704 million and $703 million, respectively. Despite the slight revenue miss, the company’s overall performance was strong.
The company’s management has decided to maintain its fiscal year 2025 guidance, projecting low single-digit percentage sales growth year-over-year and mid-to-high single-digit percentage EBITDA growth. This decision comes amid ongoing uncertainties related to tariffs and macroeconomic factors, which have also delayed a potential sale or separation of the HPC segment.
In their commentary, Oppenheimer analysts noted the adjustment of the price target to $105 reflects a slightly lower multiple for the GPC segment, now assumed at approximately 10 times the fiscal year 2025 estimated EBITDA. The firm’s stance remains positive on Spectrum Brands’ prospects, as indicated by the sustained Outperform rating.
In other recent news, Spectrum Brands Holdings Inc. has been the focus of multiple financial analysts’ reports. RBC Capital Markets maintained an Outperform rating on Spectrum Brands, with a steady price target of $114.00. The firm’s analysis indicates expectations for the company’s first fiscal quarter to align with projections, anticipating modest growth across all segments.
On the other hand, Canaccord Genuity revised its price target for Spectrum Brands from $91.00 to $94.00, while maintaining a Hold rating on the stock. This adjustment followed the company’s recent earnings report, which demonstrated a mixed outcome for the fourth quarter.
In Spectrum Brands’ recent earnings call, the company reported a 20% increase in adjusted EBITDA for fiscal 2024, despite significant investments in research and development and marketing. The company also announced a 12% dividend increase and projected low single-digit net sales growth for fiscal 2025 across all business units.
These recent developments reflect the ongoing confidence in Spectrum Brands’ strategic direction and market positioning, as well as the company’s ability to navigate investments and market dynamics. The company’s recent performance and future projections, as highlighted by these analyst firms, offer a snapshot of its current financial health and anticipated growth.
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