Energizer Holdings(ENR) will be completing its spinoff of Energizer Holdings tomorrow, July 1, 2015, and renaming itself Edgewell Personal Care(EPC). Shareholders as of June 12 will receive one share of New Energizer for each share held. An explanation for the Edgewell name and its power, strength and beauty can be found here.
Though Edgewell management is bullish on the company, having just increased its buyback authorization, Morgan Stanley has downgraded it from Overweight to Equal-weight on valuation concerns.
We are downgrading Energizer to Equal-weight from Overweight as we believe the bull thesis has essentially played out with significant stock outperformance and multiple expansion over the last few quarters, as the market has preemptively priced in strategic potential for the Personal Care business (Edgewell) ahead of the pending spin, as well as a potential improving pricing environment in batteries, two key pieces of our thesis.
Disclosure: Author holds no shares in any stock mentioned