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EnerSys ENS recently announced its strategic restructuring plan to boost manufacturing productivity and focus more on its higher-performance battery technologies like Thin Plate Pure Lead and lithium-ion.
The realignment plan will involve ENS ceasing operations in its flooded lead-acid battery manufacturing plant based in Monterrey, Mexico. EnerSys will move the production to its manufacturing facility in Richmond, KY. The move will allow the company to mitigate risks related to any future potential tariffs, maximize IRC 45X tax benefits and make its cost structure optimal.
As part of the process, the company expects to incur a pre-tax charge of about $20 million. Of this, cash charges are projected to be $12.4 million, including costs related to severance, decommissioning and cleanup of the facility, contractual releases and legal charges. The remaining $7.6 million will be a non-cash charge related to inventory and equipment write-offs.
EnerSys will also invest roughly $4.5 million to boost production capacity at the flooded lead battery manufacturing plant in Bielsko-Biala, Poland. This will enable the company to cater to the increased demand in Europe. With the restructuring move, ENS anticipates achieving a pre-tax benefit of $19 million on an annual basis, starting from fiscal 2027.
ENS Stock’s Zacks Rank & Price Performance
ENS, with a $3.6 billion market capitalization, currently carries a Zacks Rank #2 (Buy). The company is set to benefit from solid product offerings, a firm focus on product innovation and strengthening demand. Increased sales of maintenance-free thin plate pure lead and lithium products bode well for the Motive Power segment. Solid momentum in the aerospace and defense end markets is aiding its Specialty segment.
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In the past year, EnerSys stock has gained 1% against the industry’s 20.7% decline.
The Zacks Consensus Estimate for fiscal 2025 earnings has increased 2.2% to $10.00 per share in the past 60 days.
Other Stocks to Consider
Some other top-ranked companies are discussed below.
DNOW INC DNOW currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
DNOW delivered a trailing four-quarter average earnings surprise of 30.4%. In the past 60 days, the Zacks Consensus Estimate for DNOW’s 2025 earnings has increased 10.2%.
Dover Corporation DOV presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 5.3%.
In the past 60 days, the consensus estimate for DOV’s 2025 earnings has increased 1.1%.
Applied Industrial Technologies, Inc. AIT presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 5.3%.
The Zacks Consensus Estimate for AIT’s fiscal 2025 earnings has improved 1.3% in the past 60 days.