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BofA Upgrades Newell Brands On Profit Upside Potential

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Priya Nigam
·1 min read
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While the shelter-in-place orders and work-from-home trends have boosted demand for several of Newell Brands Inc’s (NASDAQ: NWL) categories, the reopening of offices and educational institutions in 2021 is likely to drive a recovery in the company’s highest-margin Writing division, according to BofA Securities.

The Newell Brands Analyst: Olivia Tong upgraded Newell Brands from Neutral to Buy, while raising the price target from $24 to $27.

The Newell Brands Thesis: Categories that benefit from the pandemic environment account for around 50% of the company’s sales, but “profit skews 60% towards recovery in a normal year,” Tong said in the note.

“After a tumultuous few years, NWL has streamlined its portfolio, made investments and SKU reductions to improve its supply chain and drive efficiencies, and changed its organizational structure. These improvements position the company better for sales and earnings upsides,” she added.

The company’s current valuation does not adequately reflect the “turnaround potential from cost reduction and sales growth efforts,” the analyst noted.

NWL Price Action: Shares of Newell Brands had risen by 1.77% to $23.08 at the time of publication Friday.

Latest Ratings for NWL

Jan 2021

B of A Securities

Upgrades

Neutral

Buy

Jan 2021

Jefferies

Upgrades

Hold

Buy

Dec 2020

Wells Fargo

Initiates Coverage On

Underweight

View More Analyst Ratings for NWL
View the Latest Analyst Ratings

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