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Newell Brands (NWL)
NASDAQ:NWL
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Newell Brands
(NASDAQ:NWL)48Neutral
Positive Factors
Leadership and Innovation
Mr. Chris Peterson, who took the helm in May 2023 as NWL’s first internal CEO successor in the last two decades, is leading with a more rigorous approach to innovation.
Turnaround Strategy
The turnaround efforts including restructuring programs and improved gross margins are now more apparent, positioning the stock for a potential revaluation.
Negative Factors
Sales Guidance
Q1 guidance was weaker than expected, setting up the dreaded back half loaded guide.
Newell Brands (NWL) vs. S&P 500 (SPY)
Market Cap
$2.81B
Dividend Yield4.15%
Average Volume (3M)11.02M
Price to Earnings (P/E)―
Beta (1Y)0.98
Revenue Growth-6.77%
EPS Growth44.59%
CountryUS
Employees23,700
SectorConsumer Cyclical
Sector Strength53
IndustryConsumer Products - Household & Personal
Share Statistics
EPS (TTM)-0.52
Shares Outstanding416,200,000
10 Day Avg. Volume13,556,832
30 Day Avg. Volume11,018,917
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.37
Price to Cash Flow (P/CF)4.70
P/FCF Ratio13.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$10.03Price Target Upside49.03% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
Newell Brands Business Overview & Revenue Model
Company DescriptionNewell Brands Inc. is a leading global consumer goods company headquartered in Atlanta, Georgia. The company operates through a diversified portfolio of well-known brands across various sectors, including home and commercial products, appliances and cookware, writing instruments, outdoor and recreation products, and baby products. Some of its core brands include Rubbermaid, Sharpie, Graco, Coleman, and Yankee Candle. Newell Brands focuses on delivering innovative products that enhance the lives of consumers worldwide.
How the Company Makes MoneyNewell Brands generates revenue primarily through the sale of its diverse range of consumer products. The company operates through multiple business segments: Home Solutions, Learning & Development, Outdoor & Recreation, and others, each contributing to the overall revenue. Key revenue streams include wholesale distribution to retailers, direct-to-consumer sales through e-commerce platforms, and partnerships with major retail chains globally. The company's ability to leverage brand strength, product innovation, and strategic partnerships plays a significant role in its earnings. Additionally, Newell Brands focuses on optimizing its supply chain and expanding its market presence to drive profitability.
Newell Brands Financial Statement Overview
Summary
Newell Brands is facing financial challenges characterized by declining revenue, profitability, and equity. While the company has managed to generate positive operating cash flow, negative net income and shrinking equity are concerns. The company needs to focus on stabilizing its revenue and improving profitability to enhance financial stability.Income Statement
Newell Brands has been struggling with declining revenue and profitability over the past few years. The company reported a negative net income for the past two years and saw a significant decrease in revenue from 2022 to 2023. Gross profit margin and EBIT margin have also been under pressure. The revenue growth rate has been negative, indicating declining sales.45
Neutral
Balance Sheet
The balance sheet shows a moderately leveraged position with a debt-to-equity ratio of approximately 1.82 in 2023. Stockholders' equity has decreased, affecting the equity ratio negatively. However, the reduction in total liabilities and improvement in cash position from 2022 to 2023 offer some stability, albeit return on equity has been negative due to sustained net losses.50
Neutral
Cash Flow
Cash flow analysis reveals a mixed situation. Despite negative net income, the company managed to generate positive operating cash flow in 2023. The free cash flow decreased significantly from the previous year, reflecting challenges in maintaining positive cash flow while managing capital expenditures. Nonetheless, the operating cash flow to net income ratio indicates better cash conversion efficiency.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 7.58B | 8.13B | 9.46B | 10.59B | 9.38B | Gross Profit |
| 2.55B | 2.44B | 2.83B | 3.30B | 3.08B | EBIT |
| 67.00M | -85.00M | 882.00M | 946.00M | 812.00M | EBITDA |
| 358.00M | 107.00M | 1.12B | 1.45B | -368.00M | Net Income Common Stockholders |
| -216.00M | -388.00M | 197.00M | 622.00M | -770.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 198.00M | 332.00M | 287.00M | 440.00M | 981.00M | Total Assets |
| 11.00B | 12.16B | 13.26B | 14.18B | 14.70B | Total Debt |
| 5.01B | 5.47B | 5.89B | 5.39B | 6.08B | Net Debt |
| 4.82B | 5.14B | 5.60B | 4.95B | 5.10B | Total Liabilities |
| 8.25B | 9.05B | 9.74B | 10.09B | 10.80B | Stockholders Equity |
| 2.75B | 3.11B | 3.52B | 4.09B | 3.87B |
| Cash Flow | Free Cash Flow | |||
| 237.00M | 646.00M | -584.00M | 595.00M | 1.17B | Operating Cash Flow |
| 496.00M | 930.00M | -272.00M | 884.00M | 1.43B | Investing Cash Flow |
| -151.00M | -199.00M | 343.00M | -268.00M | -228.00M | Financing Cash Flow |
| -451.00M | -664.00M | -232.00M | -1.14B | -559.00M |
Newell Brands Technical Analysis
Neutral
6.73
Price Trends
8.60
Negative
8.86
Negative
7.94
Negative
Market Momentum
-0.58
Negative
37.00
Neutral
72.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NWL, the sentiment is Neutral. The current price of 6.73 is above the 20-day moving average (MA) of 6.70, below the 50-day MA of 8.60, and below the 200-day MA of 7.94, indicating a neutral trend. The MACD of -0.58 indicates Negative momentum. The RSI at 37.00 is Neutral, neither overbought nor oversold. The STOCH value of 72.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NWL.
Newell Brands Risk Analysis
Newell Brands disclosed 30 risk factors in its most recent earnings report. Newell Brands reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Newell Brands Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $412.58B | 28.03 | 31.05% | 2.29% | 0.49% | 5.02% | |
74 Outperform | $27.63B | 47.38 | 14.25% | 1.02% | 4.08% | -22.34% | |
71 Outperform | $48.02B | 19.17 | 290.03% | 3.37% | -1.83% | 45.13% | |
61 Neutral | $18.61B | 41.28 | 7616.67% | 3.22% | -1.98% | 474.83% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% | |
50 Neutral | $26.37B | 147.29 | -14.17% | 2.75% | 0.07% | -249.21% | |
48 Neutral | $2.81B | ― | -7.37% | 4.15% | -6.77% | 44.59% |
* Consumer Cyclical Sector Average
Performance Comparison
NWL
Newell Brands
6.73
-0.57
-7.81%
CHD
Church & Dwight
113.20
10.47
10.19%
CLX
Clorox
148.06
-2.55
-1.69%
EL
The Estée Lauder Companies
72.04
-78.48
-52.14%
KMB
Kimberly Clark
147.40
24.98
20.41%
PG
Procter & Gamble
176.26
18.60
11.80%
Newell Brands Earnings Call Summary
Earnings Call Date: Feb 7, 2025 | % Change Since: -29.75% | Next Earnings Date: Apr 25, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong focus on strategic improvements, margin expansion, and innovation, with some concerns about core sales decline and macroeconomic challenges. The company's successful debt management and tariff mitigation strategies are positive aspects, while the cautious outlook for Q1 2025 reflects ongoing uncertainties.Highlights
Core Sales Growth Improvement
Core sales trends improved across all six business units, with three turning positive, driven by innovation in the baby, writing, and commercial businesses.
Margin Expansion
Normalized gross margin improved by 460 basis points to 34.1% for the full year compared with 2023. Normalized operating margin improved by 210 basis points to 8.2%.
Record Operating Cash Flow
Generated nearly $500 million in operating cash flow, allowing a reduction in debt and a reduction in the leverage ratio to 4.9 times.
Successful Tariff Mitigation
Reduced dependence on China sourcing, with imports from China accounting for only 15% of the company's total cost of goods sold, expected to decrease to less than 10% by year-end.
Innovation and Product Launches
Significant product launches planned for 2025 across various segments, including baby, writing, kitchen, and home fragrance.
Lowlights
Core Sales Decline
Despite improvements, the company experienced a 3.4% core sales decline for the full year.
Macroeconomic Challenges
Lower-income consumers remain under pressure, and the recent appreciation of the US dollar contributes to a complex operating environment.
Q1 2025 Guidance Concerns
Projected core sales decline of 4% to 2% for Q1 2025, with a normalized loss expected between $0.09 and $0.06 per share.
Company Guidance
In the Newell Brands Inc. fourth quarter and full year 2024 earnings call, the company provided preliminary financial guidance for 2025, highlighting a focus on returning to top-line growth, with an expected core sales range between -2% and +1%. The company aims to achieve a normalized operating margin between 9% and 9.5%, representing a 110 basis point improvement from 2024. Newell Brands anticipates $450 million to $500 million in operating cash flow, driven by high single-digit reductions in the cash conversion cycle. The leadership emphasized structural improvements in gross margin, which grew 460 basis points to 34.1% in 2024, and a significant reduction in leverage ratio to 4.9 times, facilitated by substantial debt reduction. The call also addressed ongoing tariff mitigation strategies, with exposure to Chinese imports expected to fall below 10% of the total cost of goods sold by year-end.Newell Brands Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Newell Brands Approves 2025 Long-Term Incentive Plan
Neutral
Feb 19, 2025
On February 17, 2025, Newell Brands Inc.’s Compensation and Human Capital Committee approved the 2025 Long-Term Incentive Plan, which includes performance-based and time-based restricted stock units for key employees, vesting over three years based on performance metrics. Additionally, the committee established the 2025 Bonus Program, linking executive bonuses to corporate and business segment performance goals, with payouts ranging from 0% to 200% of target amounts, contingent on achieving specified performance criteria.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.