Edgewell Personal Care Shares Face Mounting Headwinds

Shares of consumer goods company Edgewell Personal Care are trading near their lowest point in a year, pressured by a confluence of negative factors including institutional selling, an earnings miss, and a recent credit rating downgrade.

The company's financial report for its fourth fiscal quarter and full year 2025, released on November 13, revealed divergent trends in its performance.
* Revenue climbed 3.8% to $537.2 million, surpassing market forecasts.
* Conversely, earnings per share (EPS) came in at $0.68, falling short of the $0.82 consensus estimate among analysts.

Management provided guidance for the ongoing 2026 fiscal year, projecting EPS in a range between $2.15 and $2.55.

Stock Price Hits Annual Low

In Tuesday's trading session, the stock opened at $15.91 and touched a new 52-week low of $15.88. This price level stands significantly below the yearly peak of $37.72. The company's current market valuation is approximately $739 million.

Should investors sell immediately? Or is it worth buying Edgewell Personal Care?

Institutional Investors Trim Holdings

Activity from major funds indicates growing caution. Gabelli Funds LLC notably reduced its stake by 136,500 shares during the second quarter of 2025, a decrease of 19.3%. Overall, institutional investors control about 91.9% of the company's shares.

S&P Downgrades Credit Rating

Adding to the challenges, S&P Global Ratings downgraded Edgewell's creditworthiness to 'BB-' on November 25. The agency cited a slower-than-anticipated recovery, weak consumer demand in certain segments, and operational headwinds. S&P noted that the adjusted leverage ratio had increased to 4.9x by the close of the 2025 fiscal year.

Analyst Sentiment Cools, Dividend Sustainability Questioned

Several equity research firms have revised their targets downward in recent weeks. The average price target now sits at $23.17.
* Barclays lowered its target from $22.00 to $19.00, maintaining an "Equal Weight" rating.
* Morgan Stanley reduced its target to $21.00, also with an "Equal Weight" stance.
* RBC Capital Markets and Wells Fargo adjusted their targets to $23.00, but both retained their positive ratings of "Outperform" and "Overweight," respectively.

The current dividend policy has also come under scrutiny amid these pressures. With a quarterly payout of $0.15 per share, the dividend payout ratio has reached 115%, suggesting the distribution is not fully covered by current earnings.