Prestige Brands Holdings Inc. - Value

Prestige Brands Holdings Inc. (PBH) has surprised on the Zacks Consensus Estimate 3 out of the last 4 quarters.

Prestige Brands distributes over-the-counter healthcare, personal care and household products worldwide.

Many of the brands are well known and have been around for 70 years or more such as Spic and Span, Comet, Compound W wart treatment, Chloraseptic sore throat products, and Cutex nail polish remover.

Prestige Brands Beat by 25% in the Fiscal First Quarter of 2011

On Aug 5, Prestige Brands reported its fiscal first quarter 2011 results which surprised on the Zacks Consensus by 4 cents.

Earnings per share were 20 cents compared to the consensus of 16 cents. The company made just 16 cents in the year ago period.

Revenue rose 3% to $73.4 million from $71 million in the fiscal first quarter 2010.

Over-the-counter healthcare products are its largest segment. Revenue rose 10% in the quarter to $44.3 million on the back of strong sales of Clear Eyes, Compound W, Wartner, new Skin, Murine Tears, Percogesic and Sleep-Eze in Canada.

The Personal Care and Household Care product segments both saw revenue declines in the quarter. In household products, Spic and Span saw increases but Comet and Chore Boy saw sales declines.

Outlook for the Fiscal Second Quarter

The company is cautious about the fiscal second quarter because it has been told by retailers that the heavy buy-in of cough/cold products last year because of H1N1 will not be repeated this year. This will obviously impact revenue in the quarter.

The company didn't provide specific earnings or sales guidance.

Zacks Consensus Estimates Climb Higher

In the last month, 1 estimate out of 6 estimates for fiscal 2011 has moved higher. The Zacks Consensus Estimate is up 3 cents to 79 cents in the last 60 days.

This is EPS growth of about 7% over fiscal 2010.

The fiscal 2012 Zacks Consensus has also moved up by 4 cents to 86 cents in the last 2 months which is further earnings growth of 8.6%.

Value Fundamentals

Prestige Brands is trading under its peers at 9.9x forward estimates compared to the peers at 12.7.

Its price-to-book ratio is also lower, at 1.2 versus its peers at 1.7. The company trades with a PEG of 0.9.

Prestige Brands also has a solid return on equity of 11.4% but this was under its peers at 13.5%.

Prestige Brands is a Zacks #1 Rank (strong buy) stock.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service. You can follow her at twitter.com/traceyryniec.

 
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