The two businesses announced that they were combining in a bid to create a next generation technologically advanced platform for the cosmetics and personal care industry back in May of this year.
But that announcement did not stop a continued long-term downward trajectory for Edgewell Personal Care’s share prices, despite the tremendous success of the Harry’s business.
Harry's seemed like a good investment
The $1.4 billion acquisition of Harry’s saw share prices in Edgewell plummet by 16% when the announcement was made, which surprised many industry experts who had expected that the acquisition would boost Edgewell's standing.
Edgewell has seen its’ share price fall by 43% in the past year, while it has also fallen by 22% since the beginning of 2019.
However, that downward trajectory has finally ended after SunTrust analyst William Chappell, raised the company’s investor outlook to buy from hold, leading to a nearly 5% hike in share prices, which ended trading at $29.31 on Monday.
Did investors overlook the plus points?
In an investor note, Chappell stated his belief that the stock is currently undervalued, adding that upside catalysts included a stabilizing legacy business and the potential future divestitures of the company’s infant and feminine care segments.
The merger of the Harry’s and Edgewell business is also expected to create additional synergies that could lead to significant cost savings, as well as accelerated topline growth and enhanced value creation.
Ultimately executives at the two businesses believe that Harry’s will benefit from continued product portfolio expansion and improvement through accessing Edgewell’s global scale, infrastructure and extensive technology platform.