Newell Rubbermaid Inc. (NWL), the producer of Sharpie pens and Rubbermaid containers, highlighted the progress of its strategic plans and provided its guidance for the current and next year at its Analyst Day Meet.
Following the successful implementation of its growth plans, Newell reiterated its outlook for 2014 as it continues to anticipate core sales growth on the lower end of the 3–4% range, predicted earlier. The company still expects normalized earnings per share (EPS) toward the higher end of the $1.94–$2.00 band. The Zacks Consensus Estimate for 2014 also stands at $2.00 per share.
This Zacks Rank #2 (Buy) company initiated guidance for 2015 as well. Newell projects core sales to grow between 3.5% and 4%, and a normalized EPS of $2.16–$2.22. The Zacks Consensus Estimate for 2015, pegged at $2.20 per share, is within the company’s guidance.
Newell’s normalized EPS excludes various one-time items such as restructuring costs, expenses related to the harness buckle recall, currency devaluation and income from discontinued operations.
The company also threw light on its Growth Game Plan progress. Moreover, Newell provided an update on its strategic plans for innovations, brand development, enhancement of marketing and design capacities, and construction of a solid brand portfolio to speed up growth.
Newell recently struck a deal to acquire Ignite Holdings, LLC or Ignite from private equity firm North Castle Partner. The deal, which is anticipated to close by the third quarter of 2014, fits perfectly into Newell’s Growth Game Plan as Ignite’s operations are focused on product performance, design and continued innovations.
Newell aims to leverage from Ignite’s current robust momentum to enhance its distribution network, product expansion and geographic presence. The proposed acquisition of Ignite and the subsequent implementation of these strategies are likely to augment Newell’s growth rate, its normalized EPS as well as its normalized operating income margin within the first year of the deal.
Other stocks in the consumer staples sector looking attractive at current levels include Fresh Del Monte Produce Inc. (FDP), The Hain Celestial Group, Inc. (HAIN) and Pilgrim's Pride Corporation (PPC). Each of the stocks carries a Zacks Rank #1 (Strong Buy).
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