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Why Newell Brands (NWL) Should be Part of Your Portfolio
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With its Project Renewal Program, new Growth Game Plan, splendid earnings history and track record of strategic buyouts including the Jarden acquisition, Newell Brands Inc. (NWL - Free Report) remains confident of sustaining its growth momentum. Moreover, these strategic factors position the company well, thus instilling confidence among investors. Let’s delve deeper to explore more about the promising stock.
Driving Factors
Newell Brand’s Project Renewal Program, which remains on track, notably achieved savings of nearly $395 million and the company expects annual cost savings from it to approach $700 million, going forward. Further, management intends to use a major portion of the savings to accelerate growth by investing the same in business, while the remaining cost savings are expected to reflect in earnings.
Apart from strategically enhancing its financial results, the company remains keen on strengthening its portfolio by investing in its key segments, reducing activities with marginal profitability, and exiting certain businesses and markets.
Alongside, Newell Brands 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. In this regard, the company revealed its intention to reduce 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 intends 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 not only reflect the company’s focus on simplifying its operating structure, but also highlight its commitment toward making prudent investments in areas with higher growth potential.
Newell Brands scored a hat trick with an earnings beat in the third quarter of 2016. The company has a splendid surprise history with a beat recorded in 26 out of the last 28 quarters. Also, both top and bottom lines improved year over year in the reported quarter. (Read more: Newell Beats on Q3 Earnings, Updates 2016 Outlook)
Following a splendid quarter, management raised the lower end of its core sales and adjusted earnings guidance for 2016.
Hurdles
Despite the aforementioned positives, the company’s significant global presence exposes it to currency woes, and any further prevalence of these headwinds is likely to hurt results. Also, Newell Brands faces intense competition from numerous manufacturers and distributors of consumer and commercial products, such as Avery Dennison Corporation (AVY - Free Report) which poses a threat.
Blue Buffalo Pet Products, with a long-term earnings growth rate of 16%, has gained roughly 28.2% year to date.
Ollie's Bargain Outlet, with a long-term earnings growth rate of 20.2%, has jumped nearly 58% in the past one year.
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Why Newell Brands (NWL) Should be Part of Your Portfolio
With its Project Renewal Program, new Growth Game Plan, splendid earnings history and track record of strategic buyouts including the Jarden acquisition, Newell Brands Inc. (NWL - Free Report) remains confident of sustaining its growth momentum. Moreover, these strategic factors position the company well, thus instilling confidence among investors. Let’s delve deeper to explore more about the promising stock.
Driving Factors
Newell Brand’s Project Renewal Program, which remains on track, notably achieved savings of nearly $395 million and the company expects annual cost savings from it to approach $700 million, going forward. Further, management intends to use a major portion of the savings to accelerate growth by investing the same in business, while the remaining cost savings are expected to reflect in earnings.
Apart from strategically enhancing its financial results, the company remains keen on strengthening its portfolio by investing in its key segments, reducing activities with marginal profitability, and exiting certain businesses and markets.
Alongside, Newell Brands 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. In this regard, the company revealed its intention to reduce 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 intends 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 not only reflect the company’s focus on simplifying its operating structure, but also highlight its commitment toward making prudent investments in areas with higher growth potential.
NEWELL BRANDS Price and Consensus
NEWELL BRANDS Price and Consensus | NEWELL BRANDS Quote
Impressive Q3 Performance
Newell Brands scored a hat trick with an earnings beat in the third quarter of 2016. The company has a splendid surprise history with a beat recorded in 26 out of the last 28 quarters. Also, both top and bottom lines improved year over year in the reported quarter. (Read more: Newell Beats on Q3 Earnings, Updates 2016 Outlook)
Following a splendid quarter, management raised the lower end of its core sales and adjusted earnings guidance for 2016.
Hurdles
Despite the aforementioned positives, the company’s significant global presence exposes it to currency woes, and any further prevalence of these headwinds is likely to hurt results. Also, Newell Brands faces intense competition from numerous manufacturers and distributors of consumer and commercial products, such as Avery Dennison Corporation (AVY - Free Report) which poses a threat.
Zacks Rank
Currently, Newell Brands has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry include Blue Buffalo Pet Products, Inc. (BUFF - Free Report) and Ollie's Bargain Outlet Holdings, Inc. (OLLI - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Blue Buffalo Pet Products, with a long-term earnings growth rate of 16%, has gained roughly 28.2% year to date.
Ollie's Bargain Outlet, with a long-term earnings growth rate of 20.2%, has jumped nearly 58% in the past one year.
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>>