ENS - EnerSys: Softer Momentum But Clarity On Taxes

2024-04-23 06:08:34 ET

Summary

• EnerSys, a battery maker, has seen mixed signs since last summer, with tax credits increasing but organic business performance feeling soft.
• Net debt has decreased significantly, but ENS's plans for a gigafactory will weigh on profitability and temporarily increase leverage.
• Performing a balancing act, I am taking a neutral stance here, looking for more clues about the organic performance of the business.

In the summer of last year, I believed that shares of battery maker EnerSys ( ENS ) had recharged . A recovery in sales and margins were welcomed as the company could play a role in the energy transition. Yet, after a run higher in the shares, I believed that valuations looked largely fair....

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