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Spectrum Brands Stock Rises 19% YTD: What's Next for Investors?

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Spectrum Brands Holdings, Inc. (SPB - Free Report) has shown strong performance year to date (YTD), with its shares appreciating 18.9%. This growth outpaces the industry’s rise of 17.9% and the broader Consumer Discretionary sector’s gain of 4.9% in the same period.

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The positive momentum in the SPB stock can be attributed to several key factors, including the company's ongoing Global Productivity Improvement Plan (GPIP). This plan focuses on enhancing operational efficiency and reinvesting savings into growth initiatives like innovation, brand advertising, and research and development (R&D).

Closing at $93.46 yesterday, the stock trades close to its 52-week high mark of $96.74 reached on May 10, 2024. Its current level also reflects a premium of 43.2% from its 52-week low.

The technical indicators show that the stock is trading above its 50- and 200-day moving averages, indicating strong upward momentum and suggesting sustained investor confidence in the company's performance.

The Zacks Consensus Estimate for earnings per share (EPS) has seen upward revisions. In the past 60 days, analysts have increased their fiscal 2024 and 2025 estimates by 2.1% to $4.78 and by 15.9% to $6.21 per share, respectively. These EPS estimates indicate robust year-over-year growth rates of around 212.4% and 29.8% for fiscal 2024 and 2025, respectively.

Zacks Investment Research
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SPB’s Strategic Attempt Bodes Well

Spectrum Brands' GPIP strategy focuses on consumer insights and growth-enabling functions, like technology, marketing, and R&D. The majority of the savings Spectrum Brands generates from improved efficiencies are being reinvested into the business. This plan will also enable the company to deliver value-creation and sustainable growth in the long term.

Spectrum Brands is on track with its growth strategy, with an emphasis on driving top lines by bolstering its commercial capabilities. This strategy involves substantial investments in brand-focused advertising, marketing and innovation, reflecting its commitment to stay ahead in a competitive market. In the most recent quarter, Spectrum Brands increased its spending on brand advertising and innovation by $23 million year over year, with plans to invest an additional $50 million by the end of the fiscal year.

Along with these initiatives, Spectrum Brands is preparing for a significant structural shift. The company’s internal teams and advisors made the dual-track process for the separation of the Home & Personal Care business, preparing the division for a sale, merger or spin-off transaction. This move reflects a strategic focus on streamlining operations and enhancing value.

At the same time, the organic sales across the North American Home Appliance and Global Aquatics segments have stabilized, signaling strength in these areas. Looking ahead, Spectrum Brands is well-positioned to benefit from robust consumer demand in household products and the repellent categories.

Investment Rationale for SPB Stock

Shares of Spectrum Brands have shown strength on the bourses, thanks to the company’s strategic endeavors that have reinforced its market position. By focusing on the Global Productivity Improvement Plan, the company is positioned to improve its operating efficiency and effectiveness.

Buoyed by these efforts, SPB is well-poised to achieve its long-term growth objectives. This Zacks Rank #1 (Strong Buy) stock’s momentum and effective strategies point toward its significant potential for continued appreciation.

Three Other Stocks to Consider

Some other stocks from the Consumer Discretionary sector are Funko, Inc. (FNKO - Free Report) , iPower Inc. (IPW - Free Report) , and Crocs, Inc. (CROX - Free Report) .

iPower, an online retailer and supplier of consumer home, pet, garden, outdoor and consumer electronics products, carries a Zacks Rank #1 at present. IPW has a trailing four-quarter earnings surprise of 99.2%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for iPower’s current financial-year sales indicates growth of 7.2% from the year-ago corresponding figure.

Funko, a pop culture consumer products company, carries a Zacks Rank #2 (Buy). FNKO has a trailing four-quarter earnings surprise of 87.6%, on average.

The Zacks Consensus Estimate for Funko’s current financial-year sales indicates a decline of 1.7% from the year-ago reported figures.

Crocs develops and manufactures lifestyle footwear and accessories. It currently has a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 14.9%, on average.

The Zacks Consensus Estimate for Crocs current financial-year sales and earnings implies an improvement of 4.0% and 6.9%, respectively, from the prior-year actuals.


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