Here's How to Play Newell Stock After a 36% Decline in 3 Months

Core Viewpoint - Newell Brands Inc. (NWL) has experienced a significant stock decline of 36% over the past three months, contrasting with the industry's growth of 1.1% and the broader Zacks Consumer Staples sector's return of 3.6% [1] Stock Performance - NWL stock closed at $6.58, nearing its 52-week low of$5.39, and is trading below its 50- and 200-day moving averages, indicating potential weakness in momentum [3] Financial Challenges - Newell is facing multiple headwinds affecting its financial performance, including inflationary pressures that have led to muted demand for discretionary and durable products. The company anticipates continued challenges in 2025, particularly for lower-income consumers [4] - The Outdoor & Recreation segment, the smallest in terms of revenue and profitability, saw a 7.9% year-over-year decline in net sales in Q4 2024, with core sales dropping 3.7%. Significant core sales growth is not expected until 2026 [5] - The company has lowered its fiscal 2025 sales guidance to a decline of 2-4% year-over-year, with net sales for Q1 2025 expected to decline by 5-8% and core sales anticipated to drop by 2-4% [6] Earnings Estimates - The Zacks Consensus Estimate for Newell's earnings per share has been revised downward, with estimates for 2025 and 2026 decreased by a penny to 72 cents and 85 cents per share, respectively [7] Strategic Initiatives - Newell is focusing on innovation, brand building, and improving sales in profitable markets. The company has introduced a new operating method aimed at enhancing efficiency and adaptability [10][11] - The organizational realignment is designed to strengthen commercial capabilities, enhance consumer insights, and improve brand communication, which is expected to drive operational efficiencies and reduce complexity [12] - In 2025, Newell aims to improve profit margins, reduce debt, enhance cash flow, and invest in restructuring projects to boost long-term efficiency [13] Conclusion - Newell Brands is currently facing significant challenges, with stock performance declining and trading below key moving averages. However, strategic initiatives may support long-term recovery [14]