Pros and Cons For Buying Newell Brands Inc. (NWL)

Here’s how investors should make decisions about buying, holding or selling Newell Brands Inc. (NASDAQ:NWL) stock. On Tuesday, shares of Newell Brands Inc. (NASDAQ:NWL) closed higher after an active session. The shares accumulated 0.2 points or 0.94 percent at $21.56 with a light trade volume of 3.858 million shares. After opening the session at $21.5, the shares went as high as $21.82 and as low as $21.31, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $10.1 billion and now has 469.75 million shares outstanding. Newell Brands Inc. (NWL) stock has gained 5.69 percent of market value in 21 trading days.

NWL stock has a trailing 3-year beta of 1.16, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was -$14.17 a share in the trailing twelve months. The stock’s value has surged 15.98 percent year to date (YTD) against a decline of -21.91 percent in 12 month’s time. The company’s shares still trade -27.04 percent away from its 1-year high of $29.55 and 42.64 percent up from 52-week low of $15.11. The average consensus rating on the company is 2.7, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Newell Brands Inc. (NWL) will probably climb 8.35 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $36 price as 12-month high target. This represents a whopping 66.98 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $22, which represents a return potential of 2.04 percent when compared to the closing price of the stock of $21.56 on Tuesday, February 12. The lowest price target for the stock is $20 — slightly more than -7.24 percent from NWL’s current share price.

History has shown that shares in Newell Brands Inc. have gone up on 21 different earnings reaction days and are predicted to add 0.05 percent when the company reports upcoming earnings. Investors will get their next glimpse of NWL’s Q4 earnings on February 15. Analysts are forecasting revenue to suffer decline of -35.1 percent to $2.43B in the fiscal fourth quarter, while earnings are seen soaring by nearly -1.47 percent to $0.67 per share. It earned $0.81 per share, better than the $0.64, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $2.28B, worse than the $2.33B analysts expected. Earnings are estimated to increase by 122.6 percent this year, -18.91 percent next year and continue to increase by 9.4 percent annually for the next 5 years.

Let’s take a look at some insider activity at Newell Brands Inc. (NASDAQ:NWL) and see the pattern. The earliest insider trade took place on 11/26/2018. Cunningham James L Iii parted with a total of 22.33 thousand shares of company at average share price of $23.45. The total for the sales was set at $523.66 thousand. After this transaction, the SVP, Chief Accounting Officer account balance stood at 0 thousand shares. The stock lost -8.91 percent since that insider sale. On 11/12/2018, Icahn Brett, Director, purchased 100 thousand shares at a price per share of $20.03. This added 2 million shares to the insider’s fortune and the stock saw a 6.64 percent rally in value since the news became public. This transaction left 712.84 thousand shares in the Director account.

On 08/13/2018, President and CEO Polk Michael B performed a purchase transaction worth $206.3 thousand. This purchase at $20.63 each has added 10 thousand shares into the insider’s portfolio position. Meanwhile, shares have recorded 3.54 percent increase since the transaction was reported. The insider now is left with 1.14 million shares remaining in the account. Icahn Brett, who performs the Director job, bought 110 thousand shares for $2.31 million. The acquisition occurred on 08/09/2018 was priced at $21 per share. The share price soared 1.71 percent since the reporting date. Icahn Brett now left with a stake of 611.1 thousand NWL stock worth $13.18 million after the insider buying.

The stock is currently hovering around the first support level of $21.31. Below this, the next support is placed in the zone of $21.05. Till the time, the NWL stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 52.81 on daily chart, which may remain a cause for concern. If the price breaks below $21.05 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $21.82 mark may result into a pull-back move towards $22.07 level.

Further, it is sporting a 1.01 on the Price-to-Sales ratio. Compare this with the industry average P/S of 5.76. 34.1 percent is the gross profit margin for Newell Brands Inc. and operating margin sits at -78.5 percent. Along with this, the net profit margin is -70.5 percent.