Newell Brands Inc.’s SWOT analysis: tariff impact on consumer goods stock

Newell Brands Inc. (NASDAQ:NWL), a leading global consumer goods company currently trading at $13,533.90, has been navigating a complex business environment characterized by tariff challenges, category fluctuations, and ongoing efforts to optimize its business model. This comprehensive analysis examines the company’s recent performance, strategic initiatives, and future prospects in light of these factors. According to InvestingPro, the stock has demonstrated resilience with a 12.39% return over the past year.

Company Overview and Recent Performance

Newell Brands operates in the U.S. Consumer Household Products & Beverages sector, boasting a diverse portfolio of well-known brands across various product categories. The company has been implementing a new business model aimed at driving growth and improving operational efficiency.

In the fourth quarter of 2024, Newell Brands demonstrated signs of improvement, with sequential progress in the second half of the year. The company achieved margin expansion and modest bottom-line upside, indicating positive momentum. The stock’s YTD performance shows a 9.58% gain, reflecting investor confidence in these improvements. However, guidance for future performance has been less than ideal, potentially threatened by ongoing tariff concerns.

Want deeper insights into NWL’s performance metrics and growth potential? InvestingPro offers exclusive analysis and detailed financial metrics that can help you make more informed investment decisions.

Analysts project earnings per share (EPS) growth from $0.70 in fiscal year 2025 to $0.88 in fiscal year 2026, suggesting confidence in the company’s ability to increase profitability despite external challenges.

Business Model and Strategy

Newell Brands’ recent implementation of a new business model has been a focal point for investors and analysts. The company’s management, led by President & CEO Chris Peterson and CFO Mark Erceg, has been actively engaging with the financial community to communicate the progress and potential of this strategic shift.

The new model aims to streamline operations, enhance product innovation, and improve market responsiveness. While the full impact of these changes is yet to be realized, analysts generally view the direction as positive for the company’s long-term prospects.

Market Position and Competitive Landscape

Newell Brands competes in a diverse range of consumer product categories, including Baby and Writing segments. The company’s market position is supported by its strong brand recognition and extensive distribution network. Trading between its 52-week range of $11,100.90 to $13,718.71, the stock has shown resilience despite market volatility. However, analysts have noted potential slowdowns in key product categories, which could pose challenges to growth in the near term.

The consumer goods sector remains highly competitive, with companies vying for market share and shelf space. Newell’s ability to maintain and grow its position will depend on successful product innovation, effective marketing strategies, and efficient supply chain management.

Tariff Impact and Mitigation Efforts

One of the most significant factors affecting Newell Brands’ performance and outlook is the impact of tariffs. The company faces near-term volatility due to these trade measures, which has become a major concern for investors and a key focus for management.

Analysts expect Newell to address the impact of tariffs and their mitigation efforts in upcoming communications. While tariffs present challenges in the short term, some analysts believe that Newell Brands may be positioned to benefit from them in the long run, potentially improving its competitive standing.

Future Outlook and Growth Prospects

Despite the headwinds, Newell Brands’ fundamentals appear to be improving. Analysts anticipate that core sales growth will turn positive later in 2025, signaling a potential inflection point for the company. This expectation is based on the company’s strategic initiatives and the gradual realization of benefits from its new business model.

Margin expansion remains a key focus area, with the company demonstrating progress in recent quarters. As Newell continues to optimize its operations and navigate the tariff landscape, investors will be closely watching for sustained improvement in profitability metrics.

Bear Case

How might ongoing tariff challenges impact Newell’s profitability?

The persistent tariff situation poses a significant risk to Newell Brands’ near-term profitability. As a consumer goods company with a global supply chain, Newell is particularly vulnerable to trade-related cost increases. These additional expenses could compress margins and potentially lead to price increases, which might negatively impact demand for the company’s products.

Furthermore, the uncertainty surrounding tariff policies makes it challenging for Newell to accurately forecast costs and plan for the future. This unpredictability could result in conservative guidance and cautious investment decisions, potentially limiting growth opportunities. If tariffs continue to escalate or expand to cover more product categories, Newell may face increased pressure on its bottom line, potentially leading to reduced earnings and diminished shareholder value.

What risks does the company face in its key product categories?

Newell Brands operates in several product categories, including Baby and Writing segments, which analysts have identified as potentially facing slowdowns. A decline in these key categories could significantly impact the company’s overall performance. Factors such as changing consumer preferences, increased competition, or economic downturns affecting discretionary spending could contribute to reduced demand for Newell’s products.

Additionally, the company’s diverse portfolio, while providing some insulation against category-specific risks, also presents challenges in terms of resource allocation and management focus. If Newell fails to innovate or adapt quickly to market trends in its various product lines, it may lose market share to more agile competitors or niche players. The potential for inventory management issues and the need for promotional activities to move slow-moving stock could further erode profitability in underperforming categories.

Bull Case

How could Newell’s new business model drive long-term growth?

Newell Brands’ recently implemented business model presents significant potential for long-term growth and value creation. The new model is designed to enhance operational efficiency, foster innovation, and improve market responsiveness. By streamlining operations and optimizing its organizational structure, Newell can potentially reduce costs and allocate resources more effectively across its brand portfolio.

The model’s focus on innovation could lead to the development of new products that resonate with changing consumer preferences, potentially opening up new revenue streams and reinforcing the company’s market position. Additionally, improved market responsiveness could allow Newell to capitalize on emerging trends more quickly than competitors, potentially gaining market share and driving sales growth.

As the new business model matures and its benefits fully materialize, Newell could see sustained improvements in profitability, cash flow generation, and return on invested capital. This could, in turn, provide the company with greater financial flexibility to invest in growth initiatives, pursue strategic acquisitions, or return value to shareholders through dividends and share repurchases.

What potential benefits could Newell derive from tariffs in the long run?

While tariffs present near-term challenges for Newell Brands, they could potentially yield long-term benefits for the company. As a large, established player in the consumer goods industry, Newell may be better positioned than smaller competitors to absorb and adapt to tariff-related cost increases. This could lead to a consolidation of market share as less resilient competitors struggle to maintain profitability.

Furthermore, tariffs could incentivize Newell to optimize its supply chain and diversify its manufacturing base. By reducing reliance on any single country for production, the company could become more resilient to future trade disruptions and potentially realize cost savings in the long term. This strategic shift could also lead to improved operational efficiency and flexibility, allowing Newell to respond more effectively to changes in demand or market conditions.

Additionally, if tariffs result in a more level playing field between domestic and international manufacturers, Newell’s strong brand portfolio and established market presence could provide a competitive advantage. The company could potentially capture a larger share of the domestic market as consumers shift towards products perceived as "Made in America," aligning with potential changes in consumer sentiment driven by trade policies.

SWOT Analysis

Strengths:

• Diverse portfolio of well-known consumer brands
• Improving fundamentals and margin expansion
• New business model focused on efficiency and innovation
• Strong market presence and distribution network

Weaknesses:

• Near-term volatility due to tariff impacts
• Potential slowdowns in key product categories (e.g., Baby and Writing)
• Challenges in accurately forecasting costs due to trade uncertainties
• Complex portfolio requiring careful resource allocation

Opportunities:

• Long-term benefits from tariff-driven industry changes
• Potential for positive core sales growth inflection in 2025
• Margin expansion through operational efficiencies
• Innovation-driven growth in existing and new product categories

Threats:

• Ongoing tariff challenges and trade policy uncertainties
• Intense competition in the consumer goods sector
• Changing consumer preferences and spending patterns
• Economic factors affecting discretionary spending

Analysts Targets

• Barclays: Overweight, $9.00 (August 4th, 2025)
• Barclays: Overweight, $9.00 (May 2nd, 2025)
• Barclays: Overweight, $8.00 (April 30th, 2025)
• RBC Capital Markets: Sector Perform, $9.00 (April 28th, 2025)
• Barclays: Overweight, $11.00 (March 11th, 2025)
• RBC Capital Markets: Sector Perform, $9.00 (February 10th, 2025)

This analysis is based on information available up to August 13, 2025, and reflects the complex landscape Newell Brands Inc. navigates as it seeks to drive growth and create value in a challenging business environment.

For comprehensive insights into NWL’s valuation and future prospects, explore the detailed analysis available on InvestingPro. Our Pro Research Report provides in-depth coverage of NWL’s financial health, competitive position, and growth potential, helping you make more informed investment decisions.

InvestingPro: Smarter Decisions, Better Returns

Gain an edge in your investment decisions with InvestingPro’s in-depth analysis and exclusive insights on NWL. Our Pro platform offers fair value estimates, performance predictions, and risk assessments, along with additional tips and expert analysis. Explore NWL’s full potential at InvestingPro.

Should you invest in NWL right now? Consider this first:

Investing.com’s ProPicks, an AI-driven service trusted by over 130,000 paying members globally, provides easy-to-follow model portfolios designed for wealth accumulation. Curious if NWL is one of these AI-selected gems? Check out our ProPicks platform to find out and take your investment strategy to the next level.

To evaluate NWL further, use InvestingPro’s Fair Value tool for a comprehensive valuation based on various factors. You can also see if NWL appears on our undervalued or overvalued stock lists.

These tools provide a clearer picture of investment opportunities, enabling more informed decisions about where to allocate your funds.

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