UBS lifts Spectrum Brands price target to $78 from $76

On Friday, UBS analyst Peter Grom updated the price target on Spectrum Brands shares, traded on the New York Stock Exchange under the ticker (NYSE:SPB), raising it to $78.00 from the previous target of $76.00. The firm maintained a Buy rating on the stock. According to InvestingPro data, the stock currently trades significantly below its Fair Value, with analyst targets ranging from $65 to $110. The adjustment followed Spectrum Brands’ second fiscal quarter results, which fell short of expectations in terms of sales and EBITDA. While the company has withdrawn its guidance due to uncertainties, InvestingPro analysis shows the company maintains strong fundamentals with a "GOOD" overall Financial Health score and a current ratio of 2.34, indicating liquid assets exceed short-term obligations.

Despite the initial negative reaction that saw Spectrum Brands’ shares drop by 7%, the stock managed to recover throughout the trading day, closing with a gain of 3.6%. This rebound was attributed to several factors, including broader market movements and positive remarks regarding tariffs. Analysts believe that the market’s response might also indicate a perception that the tariff situation could turn out to be less detrimental than initially anticipated.

UBS analysts took note of the complex situation regarding tariffs and consumer demand. They acknowledged the challenges in making firm predictions but suggested that the tariff impact might be less severe than feared. While the financial forecasts for fiscal year 2025 have been lowered, expectations for fiscal year 2026’s EBITDA remain largely the same, albeit still below consensus estimates.

The report concluded by addressing the near-term catalysts for Spectrum Brands’ stock, which are expected to be closely tied to developments in tariffs and consumer demand. Despite these uncertainties, UBS analysts consider the risk/reward balance to be favorable. They highlighted the stock’s current trading multiple at approximately 7.4 times the revised fiscal year 2026 EBITDA estimates, suggesting an upside potential for investors willing to hold the stock over a longer period. InvestingPro analysis reveals additional positive indicators, including management’s aggressive share buybacks and projected profitability for this year. For deeper insights into Spectrum Brands’ valuation and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

In other recent news, Spectrum Brands Holdings Inc . reported a significant earnings miss for the second quarter of 2025. The company’s earnings per share came in at $0.68, falling short of the forecasted $1.44. Additionally, revenues were below expectations, reaching $675.7 million compared to the anticipated $698.91 million. Despite these results, Spectrum Brands has undertaken cost-saving measures projected to save $10 million annually, while also increasing brand-focused investments by $3 million. The company has withdrawn its earnings framework for fiscal 2025 to focus on protecting its balance sheet and generating free cash flow. Spectrum Brands is also exploring potential mergers and acquisitions in the pet and home categories. CEO David Mora emphasized the company’s strategic shift to transition supply chains out of China, with a goal of zero sourcing from China in the Home and Garden segment by fiscal 2026.

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