Newell Brands Inc. (NASDAQ:NWL), which is in the consumer durables business, and is based in United States, saw a significant share price rise of over 20% in the past couple of months on the NASDAQGS. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine Newell Brands’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
What's the opportunity in Newell Brands?
Good news, investors! Newell Brands is still a bargain right now. According to my valuation, the intrinsic value for the stock is $22.93, but it is currently trading at US$16.68 on the share market, meaning that there is still an opportunity to buy now. However, given that Newell Brands’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Newell Brands?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a relatively muted revenue growth of 7.4% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Newell Brands, at least in the short term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since NWL is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on NWL for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy NWL. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Newell Brands. You can find everything you need to know about Newell Brands in the latest infographic research report. If you are no longer interested in Newell Brands, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.