Energizer Holdings Inc (NYSE:ENR) shares were climbing in early trading on Tuesday.

The company is poised to benefit from a "return to stability" in the battery category and the U.S. consumer was "healthy," according to Truist Securities.

Analyst Bill Chappell upgraded the rating for Energizer Holdings from Hold to Buy, while raising the price target from $30 to $40.

The Energizer Holdings Thesis: The consumer battery category, which had been under pressure due to stiff competition and the proliferation of smartphones with rechargeable batteries, is poised to benefit from GDP growth and "strong visibility into consumer demand growth," Chappel said in the upgrade note.

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"ENR YoY battery sales, excluding FX, have gone from (3.1%) in F3Q23 to +0.4% in F3Q24 and we expect YOY growth to continue for the foreseeable future," he further wrote.

Recent commentary from Target and Walmart "indicate that U.S. consumer spending is steady," which supports sentiment for Energizer's ability to return to growth, the analyst stated.

"ENR trades at a meaningful discount to its consumer staples peers," Chappel said, "The positive attributes of the story will become more apparent in the coming months and the risk/reward at current levels is highly compelling," he added.

ENR Price Action: Shares of Energizer Holdings had risen by 6.85% to $32.44 at the time of publication on Tuesday.

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