JPMorgan upgrades Newell Brands to overweight thanks to tariff-hedging abilities

CNBC

13-06-2025

Newell Brands ' tariff-hedging advantages gives it a leg up over its peers, according to JPMorgan. The bank upgraded shares of the consumer and commercial goods manufacturer to an overweight rating from neutral. Simultaneously, analyst Andrea Teixeira raised her price target to $7 per share from $6. Newell, which owns brands such as Rubbermaid, Paper Mate, Sharpie, Elmer's, Yankee Candle and Crock-Pot, has stumbled 45% so far this year. However, Teixeira's revised forecast implies an upside of 29% from the stock's Thursday closing price of $5.43. NWL YTD mountain NWL YTD chart One reason for the upgrade comes from a recent meeting with several members of Newell's senior management. "We came away more confident that NWL is finally on the right track to deliver on the turnaround with a more focused portfolio, efficient systems and logistics that should set NWL as a winner in its categories, in particular as the company is a tariff beneficiary with most of its manufacturing in the U.S. vs. abroad for most competitors, including private label," Teixeira wrote. As additional catalysts, the analyst pointed to Newell's increased speed of recent innovation, alongside its distribution gains in key retailers. She added that Newell is also in a good position to hedge tariff risks, and could even gain more market share since most of its peer companies source from abroad. "We think NWL is tariff advantaged with its 15 U.S. plants and two U.S. MCA-compliant plants in Mexico, and is likely to benefit as the company secures more retailer wins in its 19 tariff-advantaged categories, which in turn would aid the top line and in turn gain market share," she wrote. "As it relates to tariff risk for NWL, majority of 15% China sourcing is due to baby gear but this is an industry-wide issue and was exempt under Section 301 during Trump 1.0." Additional tailwinds for Newell Brands include financial deleverage and continuing margin improvement.