To The Moon

$Newell(NWL)$

After years of lackluster performance and investor frustration, Newell Brands (NASDAQ: NWL) is once again finding itself under the microscope of value-oriented investors. Once a household products juggernaut with a portfolio of iconic brands like Rubbermaid, Sharpie, Coleman, and Yankee Candle, Newell has seen its stock price decline precipitously over the past several years, even trading in “penny stock” territory below $10 per share in early 2025.

But is the market finally underestimating the turnaround potential of this battered consumer goods player? As we head deeper into 2025, some contrarian investors are starting to argue that Newell Brands is oversold, undervalued, and — with disciplined execution — positioned to rebound in the coming quarters.

Below we examine Newell’s recent earnings trends, operational challenges, and the fundamentals that could support a recovery, and we close with an analysis of whether NWL merits a buy, hold, or sell at current levels.

A Once-Proud Consumer Goods Powerhouse in Decline

Newell Brands is hardly a small-cap startup. It is a $2.5 billion market cap company (as of July 2025), still generating more than $8 billion in annual sales from a vast portfolio of brands. Over the decades, the company has amassed a wide array of products in office supplies, food storage, home fragrances, baby gear, and outdoor goods — many of them leaders in their respective niches.

However, Newell’s stock has been on a painful, multi-year slide. After peaking near $55 per share in 2017, NWL has declined by more than 85%, weighed down by operational missteps, excess leverage, a bloated brand portfolio, and declining consumer demand in certain categories. The COVID-19 pandemic briefly lifted sales of home-related products, but those gains proved unsustainable as demand normalized and inflation began eroding consumer spending power.

Management’s repeated restructuring efforts — including divestitures, cost-cutting, and debt reduction — have yet to restore investor confidence. As a result, Newell now trades at a price-to-sales ratio of less than 0.3x and a forward P/E under 7x, valuations that imply little to no growth ahead.

Q1 2025 Earnings: Signs of Stabilization?

In its most recent quarterly earnings report (Q1 2025), Newell posted revenue of $1.64 billion, down roughly 7% year over year, continuing the pattern of modest sales declines. However, management highlighted improving margins and progress in debt reduction as key positives. Adjusted earnings per share came in at $0.05, slightly ahead of consensus estimates.

CEO Chris Peterson noted that Newell’s Project Phoenix — a comprehensive restructuring plan unveiled in 2023 — is delivering early benefits through supply chain simplification, SG&A reductions, and inventory rationalization. Operating cash flow also turned positive after several quarters of outflows, which is critical given the company’s still-heavy debt load (about $4.6 billion at the end of Q1 2025).

While headline numbers remain underwhelming, the company seems to be making tangible progress on its goal of reducing costs by $220–250 million annually by 2026.

Balance Sheet and Dividend: Still a Drag

One of the biggest challenges for Newell is its balance sheet. Years of acquisitions left the company over-leveraged, and while it has reduced net debt by nearly $1 billion since 2021, its debt-to-EBITDA remains above 4x — uncomfortably high for a company in a cyclical, low-margin industry.

The company suspended its dividend in 2024, a prudent but unpopular move among income-focused shareholders. As a result, the stock lost further appeal among traditional dividend investors, helping to drive shares down to multi-decade lows earlier this year.

Management has reiterated its commitment to restoring financial flexibility before resuming shareholder payouts, and the market seems skeptical of when — or if — that might happen.

Why Some Investors See a Rebound Coming

Despite these headwinds, Newell has several factors working in its favor that could support a rebound if properly executed.

1. Deep Value Valuation

At under $7 per share, NWL trades at a forward P/E of about 6.8x and an EV/EBITDA multiple of less than 5x — valuations typically reserved for companies in distress. Yet, Newell is still profitable, generates cash, and commands strong brand recognition. If margins improve just modestly as Project Phoenix delivers, the stock could see meaningful upside from current depressed levels.

2. Iconic Brands With Pricing Power

Many of Newell’s brands hold strong positions in their categories, including Rubbermaid in food storage, Graco in baby products, and Yankee Candle in home fragrances. These categories may not grow quickly, but they have predictable, recurring demand, and Newell has been able to raise prices selectively to offset inflation.

3. Margin Expansion Potential

Newell’s current operating margins are in the low single-digits, far below historical norms. Project Phoenix aims to simplify the company’s supply chain and eliminate redundant costs, which could lift margins by 200–300 basis points over the next two years. Even modest margin expansion could have an outsized impact on earnings at today’s depressed valuation.

Market Sentiment: Still Pessimistic, but Shifting

Investor sentiment on NWL remains decidedly cautious. Short interest has hovered around 12–14% of float in recent months, reflecting skepticism that the turnaround will succeed. Analysts covering the stock are largely neutral, with price targets clustered between $6 and $10, suggesting modest upside but limited enthusiasm.

That said, contrarian interest seems to be picking up. Several hedge funds and value-oriented managers have disclosed small stakes in NWL this year, citing its steep discount to intrinsic value and potential as a turnaround story.

Fundamental Analysis: What Is NWL Really Worth?

Determining Newell’s intrinsic value requires some assumptions about growth, margins, and free cash flow. Management currently guides for adjusted EBITDA of about $900–950 million in 2025. Assuming modest improvement to $1 billion EBITDA by 2026 and a conservative EV/EBITDA multiple of 7x — closer to peers like Spectrum Brands and Clorox — that would imply an enterprise value of roughly $7 billion.

After subtracting net debt of about $4.6 billion, this suggests an equity value of approximately $2.4 billion, or about $10 per share — roughly 40–50% above current trading levels.

More aggressive scenarios — assuming stronger revenue stabilization and margin recovery — could justify a price closer to $12–14 per share, but these outcomes depend on management’s execution and broader consumer trends.

Verdict: Buy, Hold, or Sell?

At its current price near $7, Newell Brands appears undervalued relative to both its historical performance and its intrinsic value under reasonable assumptions. However, the company remains highly leveraged, and its turnaround is still in the early innings.

For long-term, risk-tolerant investors who are comfortable with turnaround situations and can stomach continued volatility, NWL may represent a speculative buy at current levels. A position here should be sized appropriately, given the company’s elevated financial and operational risks.

For more conservative investors seeking stability, NWL is better viewed as a hold, with a potential to revisit if and when balance sheet progress and margin recovery become more apparent.

Conclusion: A Deep Value Play With Execution Risk

Newell Brands is a classic contrarian story — a once-great company struggling to reclaim its footing amid operational missteps, changing consumer trends, and high debt. At less than 0.3x sales and under 7x earnings, the stock appears priced for continued decline, but the early signs of progress under Project Phoenix suggest a path back to relevance.

The question investors must ask is whether management can sustain its cost-cutting efforts, stabilize sales, and restore profitability — all while managing its heavy debt load. If so, NWL has the potential to deliver market-beating returns from today’s depressed levels.

For now, the stock remains a high-risk, high-reward opportunity best suited for patient investors who believe in the turnaround story.

Takeaways:

• Newell Brands trades at multi-decade lows, with valuation metrics suggesting deep value.

• Operational turnaround efforts are showing early signs of success but face execution risk.

• Leverage remains high and could limit flexibility in a downturn.

• Intrinsic value estimates suggest potential upside of 40–50% over the next 1–2 years.

• NWL is a speculative buy for contrarian, long-term investors willing to take on above-average risk.

Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.

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