Energizer Holdings (NYSE:ENR) is down almost 8% in mid-day trading on Monday after the battery maker announced a 1Q miss. Morgan Stanley reiterated an Equal-weight rating and $33.00 price target on the company following the report.

ENR reported Q1 EPS of $0.72, below the $0.77 consensus, with a -5.4% organic sales decline below the -1.8% consensus. Organic sales declined 5.4% y/y and were below -LSD guidance. On the positive side, pricing drove 550 bps of y/y contribution, project momentum drove 80 bps,and mix +30 bps, partially offset by product costs -420 bps,and FX/other -90 bps.

ENR maintained FY23 EPS guidance of $3.00-$3.30, bracketing the $3.16 Visible Alpha consensus, as well as its adjusted EBITDA guidance of $585-615M vs. the $603.5M Visible Alpha consensus. However, given FX is less unfavorable, analysts believe that maintained guidance is a disappointment.

Morgan Stanley wrote in a note, “We will look for more detail on the call regarding how much of an organic sales miss in Q1 was retailer inventory cuts, which are more temporary and were noted in the release, and how conservative ENR is choosing to be this early in the year with FY guidance.”

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