NWL - Embedded Expectations Analysis - 2020 07 02
Newell Brands Inc. (NWL:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 13.5x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may be concerned about their operating margin, brand resiliency, and consumer demandSpecifically, management may lack confidence in their ability to expand their operating margin, continue to improve their cash conversion cycle, and minimize working capital tied up to less in-demand inventory. In addition, they may lack confidence in their ability to keep their factories and distribution centers open and safe, execute e-commerce growth opportunities, and be more innovative with their brands. Furthermore, management may be concerned about their ability to remain compliant with their debt covenants and the pace of consumer demand and purchasing trend normalization, and they may be exaggerating the economic resiliency of their brands. Finally, they may lack confidence in their ability to mitigate supply chain risks and fulfill their customer order book
Newell Brands is a global marketer of consumer and commercial products. The company's segments include: Appliances and Cookware, which designs, manufactures, sources, markets and distributes a various line of household products; Food and Commercial, which designs, manufactures, sources, markets and distributes a various line of household products; Home and Outdoor Living, which designs, manufactures, sources, markets and distributes home fragrance and home security products; and Learning and Development, which designs, manufactures, sources, markets and distributes writing instruments, including markers and highlighters, pens and pencils.
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