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On Friday, Oppenheimer analysts reiterated their Outperform rating and $115.00 price target for EnerSys (NYSE:ENS) stock. EnerSys shares experienced a modest increase on Thursday following the company’s financial results for the third quarter of fiscal year 2025, which surpassed the consensus earnings per share (EPS) estimates. Trading at a P/E ratio of 11.8 with projected FY2025 EPS of $10.22, InvestingPro analysis indicates the stock is currently undervalued. Furthermore, the company provided guidance for fourth-quarter EPS above market expectations, despite a lower sales forecast.
The analysts noted that EnerSys is witnessing a recovery in telecom orders and product sales, while service sectors continue to lag. Despite these challenges, robust demand from data centers is expected to contribute to solid top-line growth and at least high single-digit margins in fiscal year 2026. With current gross margins at 29.5% and two analysts recently revising earnings upward according to InvestingPro data, the company shows strong momentum. Additionally, the aftermarket for Class 8 vehicles is seen as a non-cyclical growth opportunity for the Specialty segment.
The acquisition of Bren-Tronics has also exceeded year-to-date expectations, contributing positively to EnerSys’s performance. The analysts acknowledged the complexity of EnerSys’s end-market dynamics and growth strategies, but emphasized the company’s consistent ability to outperform margin expectations. This strength is attributed to factors such as product mix, better absorption of costs, and ongoing benefits from cost optimization efforts. Unlock the full potential of your investment research with InvestingPro, which offers 6 additional key insights about EnerSys’s financial health and growth prospects, along with comprehensive Pro Research Reports covering 1,400+ top stocks.
EnerSys’s strong margin performance is expected to drive stronger underlying incremental financial results in fiscal year 2026. As a result, Oppenheimer analysts have modestly raised their EPS estimates for the company while maintaining their $115 price target.
In other recent news, EnerSys has been in the spotlight with a series of developments. The company reported an adjusted earnings per share (EPS) of approximately $3.12 in its fiscal third-quarter earnings report, surpassing the consensus estimate of about $2.70. However, it fell short on revenue expectations by around 3%, bringing in approximately $906 million due to disruptions at a Motive Power customer’s plant. Analysts from BTIG maintained a neutral rating on EnerSys shares following this report.
EnerSys also 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. This facility, set to start construction in 2025 and begin commercial production in 2028, will produce advanced lithium-ion cells for commercial, industrial, and defense sectors.
In analyst news, Oppenheimer upgraded EnerSys stock from Perform to Outperform, setting a new price target of $115.00. The upgrade was attributed to a brighter telecom capital expenditure forecast, clarity regarding management transitions, and progress on internal margin levers and strategic initiatives.
Additionally, EnerSys announced CEO David Shaffer’s planned retirement in May 2025, with Shawn O’Connell, currently the President of Energy Systems Global, set to take over. The company reported steady growth in specific sectors while acknowledging challenges in others during its second-quarter fiscal 2025 earnings.
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