Canaccord Genuity lowers Newell Brands stock price target on sales growth concerns

Published 04/08/2025, 18:00
Canaccord Genuity lowers Newell Brands stock price target on sales growth concerns

Investing.com - Canaccord Genuity reduced its price target on Newell Brands Inc (NASDAQ:NWL) to $9.00 from $11.00 on Monday, while maintaining a Buy rating following the company’s disappointing quarterly results and guidance. The stock, currently trading at $13,254.20, has shown resilience with an 11.8% gain over the past year, according to InvestingPro data.

The research firm cited interrupted progress in Newell’s sales recovery, with first-half 2025 core sales declining 3.4%, reversing the improvement trend seen through the second half of 2024. The company forecasts a 3% core sales decline at midpoint for the third quarter, followed by flat organic growth in the fourth quarter. Despite these challenges, InvestingPro data shows the stock has maintained a positive YTD return of 7.3%.

Canaccord noted that despite sales challenges, Newell has achieved eight consecutive quarters of significant year-over-year gross margin expansion, including 680 basis points on a two-year stack in the second quarter alone. Management continues focusing on improving the structural economics of the business under CEO Chris Peterson, who took the helm in May 2023.

The firm highlighted Newell’s strategy shift to prioritize investment in its largest and most profitable brands, reducing master brands from 80 to 55, with 25 of those accounting for 90% of the company’s sales and profit. The top 10 brands generate over 60% of sales.

Canaccord lowered its price target due to a reduced target multiple, but encouraged investors to "buy this dip," stating there is "asymmetric upside" in the shares while acknowledging that "turnarounds do not happen in a straight line." The stock currently trades well above its 52-week low of $11,100.90, suggesting some market confidence in the ongoing transformation efforts.

In other recent news, Newell Brands reported mixed results in its latest earnings report. The company managed to deliver an in-line earnings per share performance, despite experiencing weaker core sales. UBS maintained its Neutral rating on Newell Brands with a $5.50 price target, citing strong margin progress that helped offset top-line softness. Meanwhile, Citi raised its price target for Newell Brands to $6.00, maintaining a Neutral rating and anticipating a soft quarter ahead with a projected decline in core sales.

UBS also expressed cautious optimism after meeting with Newell’s management, noting the company’s efforts in tariff mitigation, innovation, and organizational alignment, which are expected to benefit growth and margins in the coming years. In a more optimistic turn, JPMorgan upgraded Newell Brands from Neutral to Overweight, increasing its price target to $7.00 due to the company’s successful turnaround efforts. Canaccord Genuity maintained a Buy rating with an $11.00 price target for Newell Rubbermaid, highlighting achievements in brand rationalization and supply chain improvements. These developments reflect a range of perspectives from analysts on Newell Brands’ current and future performance.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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