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NWL – Market expectations are for Uniform ROA to compress, but management is confident about competition, productivity, and growth

April 21, 2022

  • Newell Brands (NWL) currently trades near corporate, but above historical averages relative to Uniform earnings, with a 24.5x Uniform P/E (Fwd. V/E’).
  • At these levels, markets are pricing in expectations for Uniform ROA to compress to 13% in 2026, accompanied by 3% Uniform asset growth.

  • Similarly, analysts expect Uniform ROA to contract to 12% by 2023, accompanied by 2% Uniform asset contraction.

  • If sustained going forward, these levels would imply a stock price closer to $13, representing approximately 40% equity downside for the firm.

  • However, the firm’s most recent earnings call suggests management is confident about competition, productivity, and growth.

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