UPDATE: Morgan Stanley Upgrades Newell Rubbermaid, Expects 'Multiple Expansion' To Occur
In a note released Wednesday, Morgan Stanley analyst Dara Mohsenian upgraded Newell Rubbermaid (NYSE: NWL) from Undefined to Overweight and set a $34 price target.
In describing the reason for the upgrade, Mohsenian pointed to three key factors:
- Topline Growth: Mohsenian believes Rubbermaid will prove it can sustain revenue growth of ~4 percent. He believes this will happen through increased advertising, expansion into emerging markets and a macro recovery coming out of a "soft" first quarter.
- "Strong" Free Cash Flow: Mohsenian anticipates the company will use its "strong uncommitted" free cash flows to return value to its shareholders through acquisitions and buybacks.
- Compelling Valuation: Mohsenian says that despite a new CEO and management team, "higher-quality" EPS, and reinvestment in the company, Rubbermaid is trading below its historical multiples.
To conclude, Mohsenian wrote, "We expect multiple expansion to occur with improving balance of the year results."
Latest Ratings for NWL
|Aug 2014||B. Riley||Maintains||Neutral|
|Aug 2014||JP Morgan||Maintains||Overweight|
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