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On Monday, Citi analysts revised their outlook on Newell Rubbermaid (NASDAQ:NWL) shares, reducing the price target to $7.75 from the previous $10.50, while retaining a Neutral rating on the stock. This adjustment follows a significant decline in Newell Rubbermaid’s stock price after the company reported lower-than-expected core sales for the fourth quarter of 2024. Despite this, the company managed to surpass earnings per share (EPS) estimates. According to InvestingPro data, the stock has shown resilience with a 15.5% return over the past year and is currently trading near its 52-week high of $13,188.41.
Newell Rubbermaid’s preliminary 2025 guidance, which was presented without considering the potential effects of the new tariffs on China, has raised concerns among investors regarding the attainability of the company’s revenue forecasts. The analyst noted the ongoing softness in Newell Rubbermaid’s product categories and the lack of clear indicators that market conditions will improve. The guidance heavily relies on the second half of the year, further clouding the outlook. For deeper insights into Newell’s financial health and growth prospects, InvestingPro subscribers can access exclusive ProTips and comprehensive analysis in our detailed Pro Research Report.
The company’s operating margin percentage (OM%) and EPS projections for 2025 were within expected ranges. However, Newell Rubbermaid has acknowledged that these forecasts do not account for the impact of the newly announced tariffs on China, as well as those on Mexico and Canada. Although trade negotiations are ongoing and the company has strategies in place to mitigate the effects of tariffs, including substantial cost savings, risks to OM% and EPS are anticipated to tilt downward if the China tariffs continue.
Citi’s stance remains cautious, opting for a wait-and-see approach regarding how these factors will unfold. The substantial 26% drop in Newell Rubbermaid’s stock following the guidance announcement is viewed by the analyst as an overreaction. Nonetheless, the price target has been lowered to reflect the uncertainties ahead.
In other recent news, Newell Rubbermaid has been the subject of an upgraded price target by Canaccord Genuity, raising it from the previous $13.00 to $15.00. The firm maintains a Buy rating on the company, citing a potential turnaround following a challenging period marked by underperformance and a problematic merger with Jarden Corporation. Newell Rubbermaid’s new direction under CEO Chris Peterson, who has emphasized innovation and a focus on profitable brands, has shown signs of success, as evidenced by improvements in gross margin and sales.
In parallel, Newell Brands has secured $1.25 billion through an offering of senior notes, as confirmed by an 8-K filing with the Securities and Exchange Commission. The offering involves two sets of notes, with $750 million at 6.375% due 2030 and $500 million at 6.625% due 2032. Newell Brands aims to use the net proceeds from this offering to redeem its 4.875% senior notes due in 2025 entirely and partially redeem its 4.200% senior notes due in 2026.
These recent developments underscore Newell Rubbermaid’s strategic pivot and Newell Brands’ efforts to optimize its capital structure. Canaccord Genuity anticipates modest top-line growth for Newell Rubbermaid starting in 2025, and the successful notes offering is part of Newell Brands’ strategy to manage its debt profile.
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