Message Font: Serif | Sans-Serif
 
No. of Recommendations: 7
An article on Newell, recap of analysis by Wells Fargo.
https://sgbonline.com/wells-fargo-upgrades-newell-brands-on-...

Surprisingly, it has some actual information content, not just click bait.
It usefully recaps various recent developments, plus the recent news:
A new hedgie has entered the fray in trying to get board representation, so things keep getting more interesting.

The very short version is that they have too many little brands and want to sell a bunch to slim down to a solid core,
and three groups are arguing about which things to sell, how quickly, and who should run them afterwards.

The view of current management:
"Newell will only need to achieve a 10-11x pre-tax EV/EBITDA multiple on the brands in order to achieve the company’s goal of $10 billion in after-tax proceeds. "
The divestitures are expected to be "completed by the end of 2019, [and] Newell said it its remaining
portfolio would focus on nine core consumer divisions with approximately $11 billion in net sales and $2 billion in EBITDA."

The sum of those two seems to be worth more than the current $13.3bn market cap.

FWIW, the current price of $27.36 is about 10 times the average of 12 analyst earnings estimates for 2018 ($2.67) and 2019 ($2.89).
Given the restructuring plans, those numbers are very much speculative.
Speaking of which, Value Line's 3-5 year target is $65-$95 on the back of EPS of roughly $4.35.

Jim
(went long at $26, but not a big position)
Print the post  

Announcements

When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.