Spectrum Brands Holdings' (SPB) improving earnings power is being overlooked, as better trends in global pet care and easing pressures in the home and garden segment should help the company absorb inflation and rebuild growth beyond fiscal 2027, UBS Securities said Thursday in a report.
UBS said the current share price implies fiscal 2028 adjusted EBITDA of about $272 million, or about 19% below its own forecast and near fiscal 2022 and 2023 trough levels. That outlook is inconsistent with Spectrum's stronger execution, healthier balance sheet, and demonstrated ability to rebuild profitability through productivity initiatives, the report said.
Fiscal 2027 remains a transition year as Spectrum works through lingering cost pressures and slower consumer demand, the report said. UBS expects growth to improve beyond 2027 as comparisons ease and as pricing, innovation, and productivity efforts support a more stable revenue trajectory.
Home and personal care challenges persist, though recent pricing and product innovation are seen as positives, the report said.
UBS resumed coverage of Spectrum with a buy rating and a $97 price target.
Price: 78.94, Change: +1.90, Percent Change: +2.47
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