Energizer Stock Powers Down Amid Lawsuit

ENR calls are popular of late

Deputy Editor
Sep 9, 2020 at 10:10 AM
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Energizer Holdings Inc (NYSE:ENR) is in some legal hot water this morning. The battery-maker is being sued by Berkshire Hathaway-owned Duracell, after the former claimed that its Energizer MAX batteries last 50% longer than other alkaline batteries. This lawsuit comes just a year after Energizer sued Duracell and accused the company of falsely advertising its Optimum batteries. At last check, ENR shares are trading down  0.4% at $44.15 out of the gate today.

A reasonably-sized bear gap sent Energizer stock lower on August 5, to the tune of a now 6.2% quarterly deficit. However, there's support in place at the shares' $44 level, which happens to coincide with its 160-day moving average. Year-to-date though, the equity remains down 12%.

Meanwhile, the brokerage bunch has been optimistic on the battery maker. Of the nine in coverage, seven call it a "buy" or better and there are no "sells" to be seen. Plus, the 12-month consensus price target of $51.08 is a 15.6% premium to current levels. 

In the options pits, calls are ruling the roost. This is per Energizer stock's 50-day call/put ratio of 135.41 at the  International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 100th percentile of its annual range. This suggests a healthier-than-usual appetite for bullish bets of late. 

Similarly, Energizer's Schaeffer's put/call open interest ratio (SOIR) is at an annual call-skewed extreme of 0.11, and ranks in just the 1st percentile of reading from the past 12 months -- this indicates a pension for bullish bets.

Whatever the motive, ENR premium is affordably priced at the moment. That's because the security's Schaeffer's Volatility Index (SVI) currently stands at 46%, putting it in just the 19th annual percentile. In other words, volatility expectations appear muted at the moment.


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