Newell Brands Inc. (NASDAQ:NWL) received a lot of attention from a substantial price increase on the NASDAQGS over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Today I will analyse the most recent data on Newell Brands’s outlook and valuation to see if the opportunity still exists.
Is Newell Brands still cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 5.57% above my intrinsic value, which means if you buy Newell Brands today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $24.85, there’s only an insignificant downside when the price falls to its real value. What's more, Newell Brands’s share price may be more stable over time (relative to the market), as indicated by its low beta.
What does the future of Newell Brands look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Though in the case of Newell Brands, it is expected to deliver a relatively unexciting top-line growth of 5.8% in the next few years, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What this means for you:
Are you a shareholder? It seems like the market has already priced in NWL’s future outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on NWL, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
If you want to dive deeper into Newell Brands, you'd also look into what risks it is currently facing. Case in point: We've spotted 2 warning signs for Newell Brands you should be aware of.
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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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