Barclays Loses Confidence In Newell Brands

Newell Brands Inc NWL pre-announced its fourth-quarter results Thursday and announced the departures of key board members and a change in strategy. 

The Analyst

Barclays' Lauren Lieberman downgraded Newell Brands from Overweight to Equal Weight and decreased the price target from $35 to $26.

The Thesis

Back in November the analyst elected not to downgrade Newell Brands because she felt that the company's deeper focus on cash flow and attempts to adjust sales expectations were sound. After this morning's news release, Lieberman said she lost confidence in the stock. (See the analyst's track record here.) 

Concerns include the overhead from divestitures, incremental restructuring and the uncertainty around cash flow, Lieberman said. The near-term pipeline for innovation and Newell's ability to protect market sharen are also risks, she said.

Barclays' valuation reflects a 40-percent discount to SMID-Cap Staples peers on a calendar 2018 earnings per share estimate of $2.89.

The Price Action

Newell Brands dropped nearly 21 percent Thursday.

Related Link:

Newell Brands' Cautionary Commentary Prompts Jefferies To Downgrade The Stock 

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