Newell Brands' (NWL) Q4 does not look "particularly challenging," with data points looking "mixed thus far," RBC Capital Markets said in an earnings preview Wednesday.
The firm expects Newell's core sales growth to be slight higher than the midpoint of its Q4 guidance versus the consensus which is near the upper end.
The firm said it viewed the risk-to-reward ratio as "neutral" heading into the earnings as the company's shares had already appreciated in the latter part of 2024 following Q3 earnings.
The stock has trailed both the Consumer Staples Select Sector SPDR Fund and the S&P 500 on a 1-month basis after stalling out since mid-December and the company appears to be trading at a discount to some of its peers, though some of it may have to do with the "challenges of the last 3 years," the firm noted.
The firm said with the company likely reporting its third straight year of core sales declines in 2024, it expects the 2025 guidance to come "on-algo from a top-line standpoint." RBC said it was modeling core sales growth of 1.3% for 2025 versus the company's own long-term evergreen target of low single-digit growth.
The firm has a sector perform rating on the stock with a price target of $9.50.
Price: 9.79, Change: +0.10, Percent Change: +0.98
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