Newell Brands Investors Digest Icahn Stake, Bullish Wells Fargo Commentary

Shares of Newell Brands Inc NWL, the maker of Rubbermaid food storage and other products, moved  higher Thursday before trading down on the day after activist investor Carl Icahn revealed a 9.9-percent stake in the company.

The stock also benefited from encouraging commentary from Wells Fargo.

The Analyst

Wells Fargo's Bonnie Herzog maintains an Outperform rating on Newell Brands with an unchanged $36 price target.

The Thesis

Newell Brands CFO Chris Peterson started less than three weeks ago, but Wells Fargo's chat with the executive suggests he is a natural fit and can contribute to the company's turnaround strategy, Herzog said in a Thursday research report.

The CFO is "incredibly thoughtful" and complements CEO Mike Polk well after having performed several months of diligence on the company throughout the interview process, the analyst said. 

Peterson told the research firm his top priorities will include focusing on cash flow and prioritizing the dividend, Herzog said. The CFO is also focused on instituting cost savings and free cash flow productivity.

Newell Brands is a company thatcan  increase its market share and generate sales growth one to two points ahead of the overall category, Peterson told Wells Fargo. 

His vision "makes strategic sense" and is likely to generate shareholder value, although investors are cautioned against expecting a "straight line" moving forward, Herzog said. 

Price Action

Newell Brands shares were down 1.81 percent at at $20.03 at the close Thursday. 

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