A History of Outperforming Analyst Forecasts and Beating the Odds: Newell Brands Inc. (NWL)

Newell Brands Inc. (NASDAQ: NWL) stock fell -1.21% on Friday to $19.57 against a previous-day closing price of $19.81. With 2.47 million shares changed hands, the volume of the stock remained lighter than its average volume of 3.61 million shares. During the session, the Household & Personal Products company that operates in wider Consumer Defensive sector, reached to the highest price of $19.95 whereas the lowest price it dropped to was $19.54. The 52-week range on NWL shows that it touched its highest point at $26.45 and its lowest point at $17.40 during that stretch. It currently has a 1-year price target of $25.90. With its current market cap of 8.04 billion, NWL has annualized dividend of $0.92 while the current yield stands at 4.70%. Beta for the stock currently stands at 0.76.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of NWL was down-trending over the past week, with a drop of -5.41%, but this was up by 0.46% over a month. Three-month performance dropped to -15.94% while six-month performance fell -16.72%. The stock lost -21.18% in the past year, while it has lost -10.39% so far this year. A look at the trailing 12-month EPS for NWL yields 1.68 with Next year EPS estimates of 2.05. For the next quarter, that number is 0.56. This implies an EPS growth rate of 173.60% for this year and 9.62% for next year. EPS is expected to grow by 4.51% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 75.60%.

Float and Shares Shorts:

At present, 421.90 million NWL shares are outstanding with a float of 411.11 million shares on hand for trading. On Jul 14, 2022, short shares totaled 20.44 million, which was 4.94% higher than short shares on Jun 14, 2022. In addition to Mr. Ravichandra K. Saligram as the firm’s CEO & Director, Mr. Christopher H. Peterson serves as its Pres & CFO.

Institutional Ownership:

Through their ownership of 94.45% of NWL’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 53.49% of NWL, in contrast to 41.15% held by mutual funds. Shares owned by individuals account for 10.82%. As the largest shareholder in NWL with 10.13% of the stake, The Vanguard Group, Inc. holds 41,881,214 shares worth 41,881,214. A second-largest stockholder of NWL, Pzena Investment Management LLC, holds 36,251,194 shares, controlling over 8.77% of the firm’s shares. Icahn Associates Holding LLC is the third largest shareholder in NWL, holding 33,070,432 shares or 8.00% stake. With a 2.66% stake in NWL, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 10,988,273 shares are owned by the mutual fund manager. The iShares Tr. – Select Dividend ETF, which owns about 2.34% of NWL stock, is the second-largest Mutual Fund holder. It holds 9,659,133 shares valued at 183.91 million. Vanguard Small Cap Index Fund holds 2.27% of the stake in NWL, owning 9,403,677 shares worth 179.05 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for NWL since 12 analysts follow the stock currently. There are 5 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 7 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With NWL analysts setting a high price target of $35.00 and a low target of $19.00, the average target price over the next 12 months is $25.09. Based on these targets, NWL could surge 78.85% to reach the target high and fall by -2.91% to reach the target low. Reaching the average price target will result in a growth of 28.21% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. NWL will report FY 2022 earnings on 02/10/2023. Analysts have provided yearly estimates in a range of $1.90 being high and $1.80 being low. For NWL, this leads to a yearly average estimate of $1.83. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Newell Brands Inc. surprised analysts by $0.10 when it reported $0.57 EPS against a consensus estimate of $0.47. The surprise factor in the prior quarter was $0.09. Based on analyst estimates, the high estimate for the next quarter is $0.56 and the low estimate is $0.51. The average estimate for the next quarter is thus $0.52.

Dividends & Yield:

In terms of dividends, NWL has a current ratio of $0.92, which is $0.92 over the trailing 12-months, while a dividend of $0.91 is likely to be paid on average over the next five years. Dividend yield is another indicator that appeals to many investors, and NWL currently yields $4.7. In the past year, NWL’s dividend yield has been $4.7, but when looking at the stock over the past five years, its yield has been $4.48. Accordingly, NWL has a current buyback yield of $0.0. This was $0.0 for the TTM.

Summary of Insider Activity:

Insiders traded NWL stock several times over the past three months with 0 Buys and 0 Sells. In these transactions, 0 shares were bought while 0 shares were sold. The number of buy transactions has increased to 17 while that of sell transactions has risen to 7 over the past year. The total number of shares bought during that period was 457,979 while 10,811,789 shares were sold.

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