Newell Brands Inc. (NWL): A Bull Case Theory

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 $5.63 as of July 1^st. NWL’s trailing and forward P/E were 10.62 and 8.9 respectively according to Yahoo Finance.

Newell Brands (NWL), currently trading at $5.62, represents a contrarian yet compelling cyclical turnaround story amid an algorithm-driven market mispricing. Despite being caught in a consumer durables recession triggered by post-COVID demand pull-forwards and rising interest rates, Newell has executed a textbook cost-cutting transformation. Inspired by Nestlé, management aggressively culled low-margin brands—reducing SKUs by 80% and narrowing its portfolio from 80 to 55 brands—thereby boosting gross margins from 28.3% in Q3 2023 to 34.4% in Q1 2024.

EBITDA has surged 25% year-over-year despite shrinking revenues, a testament to operational excellence and strategic focus. Yet, the market and algorithms remain skeptical, penalizing the stock due to falling revenue, goodwill write-downs, and headline GAAP losses. However, a closer look reveals positive operating cash flow and substantial margin improvement, positioning the company for outsized gains once the cycle turns.

While management is not guiding for positive comps in 2025 due to tariff uncertainties, NWL’s EPS estimate of $0.75 reflects solid underlying performance. With less than 10% of its U.S. goods now sourced from China—down from 35%—Newell is better positioned than peers to benefit from protectionist trade trends.

A macro tailwind could emerge by 2026 when mortgage rates fall below 5.5% and a new Fed Chair potentially reignites the housing market by lowering rates to 2.5%. In a bull case, Newell could reclaim a price-to-sales multiple of 1.0x, valuing the stock between $20–$24 on $8–$10 billion in revenue by 2027. Until then, it’s a watchlist-worthy play poised for upside once current market momentum shifts.

Previously we covered a bullish thesis on Newell Brands Inc. by Unemployed Value Degen in February 2025, which highlighted the company’s turnaround execution, margin expansion, and undervaluation. The company’s stock price has depreciated approximately 34.53% since our coverage. This is because the market remains focused on declining revenue. Unemployed Value Degen shares an identical view but emphasizes on macro catalysts and algorithmic mispricing.

NWL isn't on our list of the 30 Most Popular Stocks Among Hedge Funds. While we acknowledge the risk and potential of NWL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.