We came across a bullish thesis on Newell Brands Inc. on Value Degen’s Substack by Unemployed Value Degen. In this article, we will summarize the bulls’ thesis on NWL. Newell Brands Inc.'s share was trading at $4.8800 as of August 8th. NWL’s trailing and forward P/E were 10.62 and 7.18, respectively according to Yahoo Finance.
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Newell Brands (NWL), a diversified consumer products company, remains deeply out of favor amid the ongoing consumer durables recession, yet management has executed a decisive turnaround strategy that is masked by headline numbers. Following a sharp slowdown in spending after COVID-driven durable goods pull-forward and the housing market freeze from higher rates, Newell rapidly streamlined operations, cutting its portfolio from 80 to 55 brands and reducing SKUs by 80%, focusing on higher-margin categories.
This has driven gross margin expansion from 28.3% in Q3 2023 to 34.4%, with EBITDA up 25% year over year despite lower volumes—an impressive feat given the absence of scale benefits. However, algorithms have penalized the stock for declining revenues and goodwill write-downs, missing the underlying improvement in profitability and cash flow. The company remains cash flow positive, is less than 10% exposed to China versus 35% a few years ago, and could benefit from tariffs thanks to diversified global manufacturing.
Management guides 2025 EPS of $0.75 on a $5.62 stock, with positive comps unlikely until tariff uncertainty clears. The cyclical recovery is expected when 30-year mortgage rates fall below 5.5%, potentially in 2026 if post-Powell policy shifts to 2.5% benchmark rates, unlocking housing-driven demand. At a normalized 1.0x price-to-sales multiple, NWL could trade at $20–$24 by 2027, depending on revenue recovery to $8–$10 billion. While debt reduction and dividends take priority over buybacks, the risk/reward skew is compelling for patient investors. With strong execution and strategic positioning, Newell appears well placed for significant upside when the consumer cycle turns.
Previously, we covered a bullish thesis on Newell Brands Inc. (NWL) by Unemployed Value Degen in Feb 2025, which highlighted the company’s turnaround strategy, seasonal revenue patterns, and undervaluation versus historical multiples. The stock has depreciated ~28% since our coverage due to delayed revenue growth and macro headwinds. The thesis still stands as execution remains strong. Unemployed Value Degen shares an identical view but emphasizes cyclical recovery potential by 2027.
