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Newell Brands Inc. (NASDAQ:NWL) rallied almost 10% after Cannacord initiated coverage with a Buy rating and a $13 price target.
The Rubbermaid product maker should have “better days ahead” with new management at the helm after an ugly first half of the year, Cannacord wrote in a note. Their “reasonable” strategy should “reignite modest top-line growth, improve profitability and cash flows, and reduce leverage.”
Shares of NWL are down 48% year-to-date. EPS estimates have been revised downward 10 times over the past three months. Shares have three Strong Buy ratings, one Buy, six Holds and one Sell from Wall Street analysts.
Last month, the company said it would refocus investments on its most profitable and largest brands. Cannacord noted that the company has 80 master brands, with 25 of those accounting for 90% of sales and profit.
“We believe the stock can significantly outperform once the market gets confidence in a true top-line inflection point,” Cannacord said. “After a rough H1 2023E, we expect organic sales to inflect positive in H2 (+0.6%), as destocking should have run its course.”