Breaking Down Newell Brands Inc. (NWL) Financial Health: Key Insights for Investors

Are you keeping a close watch on consumer defensive stocks? Have you considered Newell Brands Inc. (NWL), with its well-known brands like Rubbermaid and Yankee Candle? Despite a stock price of around $5.05, significantly below its 52-week high of $11.63, analysts project a potential upside of 94.55%, targeting an average price of $9.83. But with a revenue decline of 6.10% and a negative EPS of -0.52, is this a high-risk, high-reward scenario, or an undervalued opportunity waiting to be discovered? Dive in to explore the financial depths of Newell Brands and uncover key insights for investors.

Newell Brands Inc. (NWL) Revenue Analysis

Understanding where Newell Brands Inc. (NWL) generates its revenue is crucial for investors. A detailed look into its revenue streams reveals the company's strengths, weaknesses, and opportunities for growth. Let's examine the key components of Newell Brands Inc.'s (NWL) revenue.

Breakdown of Primary Revenue Sources:

Newell Brands Inc. (NWL) operates across several business segments, each contributing uniquely to its overall revenue. These segments include:

• Home & Commercial Solutions: This segment focuses on products for home organization, cleaning, and commercial solutions.
• Appliance & Cookware: This includes kitchen appliances and cookware products.
• Outdoor & Recreation: This segment offers products for outdoor activities and recreation.
• Learning & Development: Focused on writing and creative products.

In the fiscal year 2024, a significant portion of Newell Brands Inc.'s (NWL) revenue was derived from its top-performing segments. While specific figures fluctuate annually, these segments consistently drive the majority of sales.

Year-over-Year Revenue Growth Rate:

Analyzing the year-over-year revenue growth rate provides insights into Newell Brands Inc.'s (NWL) performance trends. Recent years have shown a mix of growth and decline, influenced by market conditions, strategic initiatives, and consumer behavior.

For instance, if in 2023, Newell Brands Inc. (NWL) reported a revenue of $8 billion, and in 2024, the revenue was $7.5 billion, this would represent a decrease of 6.25%. Such declines prompt further investigation into the factors driving the change, such as divestitures, changes in consumer demand, or operational challenges.

Contribution of Different Business Segments:

The contribution of each business segment to Newell Brands Inc.'s (NWL) overall revenue varies. A detailed breakdown helps investors understand which areas are performing well and which may need improvement. Here’s an illustrative example:

This table shows how each segment contributes to the total revenue, offering a clear view of the company's revenue composition.

Analysis of Significant Changes in Revenue Streams:

Significant changes in Newell Brands Inc.'s (NWL) revenue streams can result from various factors, including:

• Acquisitions and Divestitures: Buying or selling business units can significantly alter revenue streams.
• Market Trends: Shifts in consumer preferences and market demand impact sales.
• Economic Conditions: Economic downturns or expansions affect consumer spending and, consequently, revenue.
• Strategic Initiatives: Company-led initiatives, such as restructuring or new product launches, can drive revenue changes.

For example, if Newell Brands Inc. (NWL) divested a segment that previously contributed $500 million in annual revenue, this would result in a noticeable decrease in overall revenue. Conversely, a successful new product line could boost revenue in a specific segment.

Understanding these dynamics is essential for investors to assess the long-term financial health and growth potential of Newell Brands Inc. (NWL).

Newell Brands Inc. (NWL) Profitability Metrics

Analyzing Newell Brands Inc.'s profitability involves examining its gross profit, operating profit, and net profit margins to understand its financial health and operational efficiency. These metrics provide insights into how effectively the company manages its costs and generates profit from its revenue.

For the fiscal year 2024, Newell Brands reported a gross profit of $4.9 billion and a gross margin of 30.8%. The operating income was $435 million, representing an operating margin of 2.7%. Net income stood at $73 million, with a net profit margin of 0.5%.

Here's a summary of Newell Brands' profitability metrics:

When comparing Newell Brands' profitability ratios with industry averages, it's essential to consider the specific sectors in which it operates. Newell Brands competes in various segments, including home and commercial products, and outdoor and recreation. Industry averages for gross and operating margins can vary widely. For example, the consumer goods industry, in general, may have an average gross profit margin of around 35%, and an operating margin of approximately 10%. Therefore, Newell Brands' 2024 gross margin of 30.8% and operating margin of 2.7% suggests there may be opportunities for improvement in operational efficiency and cost management.

Several factors influence Newell Brands' operational efficiency. These include:

• Cost of Goods Sold (COGS): Efficiently managing the cost of raw materials and production expenses is crucial for maintaining and improving gross margins.
• Operating Expenses: Controlling administrative and selling expenses can significantly impact the operating margin.
• Pricing Strategies: Effective pricing strategies can help maximize revenue while remaining competitive in the market.
• Supply Chain Management: A streamlined supply chain reduces costs and improves delivery times, positively affecting profitability.

Gross margin trends offer insight into how well Newell Brands manages its production costs relative to revenue. A rising gross margin typically indicates improved efficiency or pricing power, while a declining margin may signal increased costs or pricing pressures.

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Newell Brands Inc. (NWL) Debt vs. Equity Structure

Understanding how Newell Brands Inc. (NWL) manages its debt and equity is crucial for investors. This involves looking at the company's debt levels, its debt-to-equity ratio, and any recent financing activities.

As of December 2024, Newell Brands had a total debt of $5.12 billion. This includes both short-term and long-term debt obligations. The company also reported having $198 million in cash and cash equivalents at the end of 2024, compared to $332 million at the end of the prior year.

The debt-to-equity ratio is a key metric for assessing a company's financial leverage. Newell Brands' debt-to-equity ratio as of the most recently reported fiscal year, ending December 31, 2024, was 1.67. A debt-to-equity ratio of 1.92 indicates that Newell has nearly twice as much debt as equity, posing a potential risk for investors.

It's also useful to consider the company's net debt, which accounts for cash reserves. In September 2024, Newell Brands had a net debt of approximately $4.58 billion, after considering its cash reserve of $494.0 million.

Recent activity shows that during the fourth quarter of 2024, Newell Brands successfully refinanced $1.25 billion of debt at attractive rates; the offering was six times oversubscribed. However, S&P Global Ratings-adjusted leverage is expected to remain above 5x for fiscal year 2024 due to continued weak demand and restructuring costs.

Newell Brands faces significant liabilities, with $3.40 billion due within a year and $5.51 billion due after that. Offsetting these, the company has $494.0 million in cash and $931.0 million in receivables due within 12 months. This results in total liabilities exceeding cash and near-term receivables by $7.49 billion.

Credit ratings provide an external assessment of a company's creditworthiness. S&P Global Ratings downgraded Newell Brands' long-term issuer credit rating to 'BB-' from 'BB' in February 2024, with a negative outlook, reflecting sustained higher leverage. Moody's Ratings also downgraded Newell Brands' Corporate Family Rating (CFR) to Ba3, maintaining a negative outlook.

Here's a summary of Newell Brands' debt-related data:

Newell Brands aims to strike a balance between debt financing and equity funding to support its growth initiatives and maintain financial stability. The company is focused on strengthening its balance sheet through debt reduction and EBITDA growth.

Explore more about Newell Brands' investor profile: Exploring Newell Brands Inc. (NWL) Investor Profile: Who’s Buying and Why?

Newell Brands Inc. (NWL) Liquidity and Solvency

Liquidity and solvency are crucial indicators of a company's financial health, revealing its ability to meet short-term obligations and sustain long-term operations. For Newell Brands Inc. (NWL), analyzing these metrics provides insights into its financial stability and risk profile. Let's delve into the key aspects of NWL's liquidity and solvency.

Assessing Newell Brands Inc.'s Liquidity:

Liquidity ratios help gauge a company's ability to cover its short-term liabilities with its short-term assets. Here’s an overview of Newell Brands Inc.'s liquidity position:

• Current Ratio: The current ratio measures a company's ability to pay off its current liabilities with its current assets. For the fiscal year 2024, we need to refer to the most recent financial statements to get the exact figure.
• Quick Ratio: The quick ratio, also known as the acid-test ratio, excludes inventory from current assets to provide a more conservative measure of liquidity. The precise value for 2024 would be available in NWL's financial disclosures.

Analysis of Working Capital Trends:

Working capital, calculated as current assets minus current liabilities, indicates a company's operational liquidity. Monitoring the trends in working capital helps assess whether the company's ability to meet its short-term obligations is improving or deteriorating.

Cash Flow Statements Overview:

Cash flow statements provide a comprehensive view of all cash inflows and outflows, categorized into operating, investing, and financing activities. Analyzing these trends can reveal a lot about a company’s financial health. Here’s what to look for:

• Operating Cash Flow: Positive operating cash flow indicates that a company’s core business activities are generating enough cash to sustain operations.
• Investing Cash Flow: This section includes cash spent on investments in assets like property, plant, and equipment (PP&E).
• Financing Cash Flow: This covers activities related to debt, equity, and dividends.

Potential Liquidity Concerns or Strengths:

Based on the 2024 financial data, it's important to identify any potential liquidity concerns or strengths. For example:

• If the current and quick ratios are consistently above 1.0, it suggests a strong liquidity position.
• Declining operating cash flow might raise concerns about the company's ability to meet its short-term obligations.

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Newell Brands Inc. (NWL) Valuation Analysis

Assessing whether Newell Brands Inc. (NWL) is overvalued or undervalued requires a look at several key financial metrics and market indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, stock price trends, dividend yield, payout ratios, and analyst consensus.

As of April 21, 2025, here's a snapshot of how these metrics can be interpreted, based on the latest available data:

• Price-to-Earnings (P/E) Ratio: The P/E ratio indicates how much investors are willing to pay for each dollar of Newell Brands Inc.'s earnings. A lower P/E ratio might suggest that the stock is undervalued, while a higher P/E ratio could indicate overvaluation. Investors should compare Newell Brands Inc.'s P/E ratio to its industry peers and its historical average to get a clearer picture.
• Price-to-Book (P/B) Ratio: The P/B ratio compares a company's market capitalization to its book value. A P/B ratio below 1.0 could suggest that the stock is undervalued, as it implies that the market is valuing the company at less than its net asset value.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: The EV/EBITDA ratio is used to assess the overall value of a company relative to its earnings before interest, taxes, depreciation, and amortization (EBITDA). A lower EV/EBITDA ratio may indicate that a company is undervalued, while a higher ratio could suggest overvaluation.

Analyzing Newell Brands Inc.'s stock performance over the past year provides context on market sentiment and investor confidence. Recent stock price trends and fluctuations can reflect broader market conditions, company-specific news, and investor expectations.

For investors, dividend yield and payout ratios are important, especially if Newell Brands Inc. is considered an income stock. The dividend yield represents the annual dividend payment as a percentage of the stock price. The payout ratio indicates the percentage of earnings paid out as dividends. A sustainable dividend yield and payout ratio can signal financial stability and a commitment to returning value to shareholders.

Analyst consensus is also an important factor. Major brokerage firms and investment banks regularly provide ratings (buy, hold, or sell) and price targets for publicly traded companies like Newell Brands Inc.. These ratings reflect the collective wisdom of financial analysts who closely follow the company and its industry.

Here is a sample table that you can fill with real-time data:

For further insights into Newell Brands Inc.'s financial health, you can explore: Breaking Down Newell Brands Inc. (NWL) Financial Health: Key Insights for Investors

Newell Brands Inc. (NWL) Risk Factors

Newell Brands Inc. (NWL) faces a variety of internal and external risks that could significantly impact its financial health. These risks span across industry competition, regulatory changes, and overall market conditions. Understanding these factors is crucial for investors assessing the company’s stability and future prospects.

One of the primary risks Newell Brands Inc. (NWL) faces is intense industry competition. The markets for household and commercial products are highly competitive, with numerous global and regional players vying for market share. This competition can lead to price pressures, reduced margins, and the need for continuous innovation to stay relevant. Maintaining a competitive edge requires ongoing investment in research and development, marketing, and efficient supply chain management.

Regulatory changes also pose a significant risk. Newell Brands Inc. (NWL) operates in a heavily regulated environment, with compliance requirements related to product safety, environmental standards, and trade regulations. Changes in these regulations can increase compliance costs, delay product launches, and potentially lead to fines or penalties. Monitoring and adapting to these changes is essential for minimizing disruptions to the company’s operations.

Market conditions, including economic downturns and shifts in consumer preferences, represent another key risk. Economic uncertainty can reduce consumer spending on discretionary items, impacting sales and profitability. Additionally, changes in consumer tastes and preferences require Newell Brands Inc. (NWL) to adapt its product offerings and marketing strategies to remain appealing. Failing to anticipate and respond to these shifts can result in declining market share and financial performance.

Recent earnings reports and filings highlight several operational, financial, and strategic risks:

• Operational Risks: Supply chain disruptions and increased raw material costs can significantly impact production and profitability.
• Financial Risks: High levels of debt and interest expenses can strain the company’s financial resources, limiting its ability to invest in growth opportunities.
• Strategic Risks: Integration challenges related to acquisitions and divestitures can hinder the realization of expected synergies and cost savings.

To mitigate these risks, Newell Brands Inc. (NWL) has implemented several strategies. These include:

• Diversifying its product portfolio to reduce reliance on any single product category or market.
• Investing in supply chain resilience to minimize disruptions from external events.
• Implementing cost-saving initiatives to improve profitability and reduce debt.
• Enhancing its e-commerce capabilities to adapt to changing consumer shopping habits.

The following table summarizes key financial data and risk mitigation efforts based on the 2024 fiscal year:

Understanding and addressing these risks is crucial for Newell Brands Inc. (NWL) to maintain its financial health and deliver value to its shareholders. For more insights into the company's strategic direction, refer to Mission Statement, Vision, & Core Values of Newell Brands Inc. (NWL).

Newell Brands Inc. (NWL) Growth Opportunities

Newell Brands Inc. (NWL) faces a dynamic market environment, requiring a multi-faceted approach to future growth. Key strategies revolve around product innovation, strategic market expansions, synergistic acquisitions, and the cultivation of strong competitive advantages.

Key Growth Drivers:

• Product Innovation: Investing in research and development to launch new products and enhance existing lines, catering to evolving consumer preferences and needs.
• Market Expansion: Extending the company's reach into new geographic regions and demographic segments, particularly in emerging markets with high growth potential.
• Acquisitions: Pursuing strategic acquisitions to expand product portfolios, gain access to new technologies, and increase market share.

Future revenue growth projections and earnings estimates for Newell Brands Inc. (NWL) hinge on several factors. According to the Q4 2023 earnings presentation, the company is focused on simplifying the organizational structure, which is expected to drive future growth. Key strategies involve:

• Accelerated Savings: Targeting approximately $90 million in savings, increasing the total savings target from Project Phoenix to between $260 million and $290 million.
• Efficiency and Productivity: By focusing on supply chain optimization and operational efficiency, Newell aims to improve profitability and reinvest in growth initiatives.
• Brand Strength: Leveraging its portfolio of well-known brands to drive sales and maintain a competitive edge.

Strategic initiatives and partnerships are crucial for Newell Brands Inc. (NWL) to unlock future growth. These include:

• E-commerce Growth: Enhancing its online presence and direct-to-consumer capabilities to capitalize on the growing e-commerce market.
• Retail Partnerships: Strengthening relationships with key retailers to ensure optimal product placement and promotional support.
• Sustainability Initiatives: Implementing sustainable practices to appeal to environmentally conscious consumers and enhance brand reputation.

Newell Brands Inc. (NWL) possesses several competitive advantages that position it favorably for growth:

• Brand Portfolio: A diverse portfolio of well-recognized and trusted brands provides a strong foundation for growth.
• Global Reach: Its extensive global distribution network enables the company to reach a wide customer base.
• Innovation Capabilities: A commitment to innovation allows Newell to stay ahead of market trends and meet evolving consumer needs.

To provide a clearer picture, here's a summary of key financial targets and strategic initiatives based on the latest information:

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