Newell Brands Inc. NWL has been doing well with its new Growth Game Plan, Project Renewal Program and solid earnings track record. In addition, its strategic buyouts, including the Jarden acquisition, also act as growth catalysts.
The stock closed trading at $45.68 yesterday and has increased 3.6% on a year-to-date basis, clearly outperforming the Zacks categorized Consumer Product–Miscellaneous Staples industry that has declined 4.7%.
Newell’s Project Renewal Program remains on track and achieved savings of nearly $395 million through first-quarter end. Management plans to utilize major part of the savings to accelerate business growth and the balance is expected to reflect in earnings. Moving ahead, the company expects annual cost savings from this program to reach nearly $700 million.
Meanwhile, the company remains keen on enhancing its portfolio by investing in key segments, reducing activities with marginal profitability, along with exiting certain businesses and markets. In order to simplify its portfolio structure, the company undertakes restructuring schemes, as evident from its recent merger with Jarden Corp. that created a new $16-billion entity with diverse operations.
Additionally, Newell declared plans to transform into an operating company from a holding company – with fresh investment plans and new ideas for its combined portfolio with Jarden. Subsequently, the company announced its intention to trim its existing 32 business units to 16 operating divisions, which include the establishment of an all-new eCommerce unit with global operations.
Further, Newell Brands plans to sell about 10% of its current portfolio, including a large chunk of its Tools segment and the Outdoor Solutions Segment’s Winter Sports businesses, among others. These changes highlight its commitment toward making strategic investments in areas with higher growth potential. Alongside, the company’s shareholder-friendly moves are noteworthy.
However, significant global presence exposes the company to currency headwinds, posing threats. Further, macroeconomic uncertainty, competitive pressure and volatile consumer behavior remain concerns for the company.
Zacks Rank & Key Picks
Newell currently has a Zacks Rank #3 (Hold). Some better-ranked stocks include The Children's Place, Inc. PLCE, Blue Buffalo Pet Products, Inc. BUFF and Edgewell Personal Care Company EPC.
The Children's Place, with a long-term earnings growth rate of 10.3%, has surged 93.3% year to date. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Blue Buffalo, which carries a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 14%. The stock has gained 28% year to date.
Edgewell Personal, a Zacks Rank #2 stock, has a long-term earnings growth rate of 8.1%.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment