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Assessing Newell Brands (NWL) Valuation After A Prolonged Share Price Slump

Simply Wall St · 5d ago

What recent performance tells you about Newell Brands

Newell Brands (NWL) has drawn investor attention after a prolonged share price slump, including a 61% total return decline over the past year and a 71% decline over the past 3 years.

With the stock recently closing at $3.72 and annual revenue of $7.256b against a net income loss of $24 million, many investors are reassessing how the business fundamentals line up with the current valuation.

See our latest analysis for Newell Brands.

That steep 61.3% 1 year total shareholder return decline, alongside a 28.3% 3 month share price pullback, suggests sentiment has weakened as investors reassess Newell Brands' risks and its current US$3.72 pricing against ongoing losses.

If Newell's recent slump has you reconsidering your options, this could be a good moment to broaden your watchlist with fast growing stocks with high insider ownership.

With the share price weak, a recent loss on US$7.256b in revenue, and a value score of 5, the key question is whether Newell Brands is now mispriced or if the market already reflects its future prospects and risks.

Most Popular Narrative Narrative: 26.3% Undervalued

With Newell Brands last closing at US$3.72 against a most-followed fair value estimate of US$5.05, the narrative frames a sizeable valuation gap for investors to weigh.

“Aggressive ongoing cost-saving initiatives, productivity improvements, and ERP system harmonization are expected to enable structural operating margin expansion, drive sustainable EBITDA and EPS growth, and ultimately improve the company's leverage profile.”

Read the complete narrative.

Want to see what earnings path could support that kind of margin reset and valuation gap? The key ingredients are modest sales growth, a sharp swing in profitability, and a leaner share count story. The detailed forecast lays out how those moving parts might line up over the next few years.

Result: Fair Value of $5.05 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, you still need to weigh the risk that core sales softness and elevated net leverage at 5.5x could cap any earnings reset if conditions stay tough.

Find out about the key risks to this Newell Brands narrative.

Build Your Own Newell Brands Narrative

If you see the numbers differently or prefer to test your own assumptions, you can build a custom Newell Brands view in minutes with Do it your way.

A great starting point for your Newell Brands research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

If Newell is just one piece of your watchlist, it makes sense to cast a wider net and stress test your thinking across different styles of opportunities.

Use these focused screens to pressure test your ideas before the market moves without you.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.