Morgan Stanley downgraded Newell Brands (NASDAQ:NWL) to Underweight and cut its price target to $3.50 from $4.00. The stock trades at $1.50, down 0.55% over the past week.
The firm expects downside to consensus estimates in H2 2026 and FY2027 due to cost pressures exceeding management guidance. It also sees risks from weaker consumer sentiment amid the Iran conflict.
Morgan Stanley acknowledged progress in Newell's turnaround, with productivity gains and a return to core sales growth expected in Q2 for the first time since 2022. However, limited pricing power and discretionary portfolio exposure raise concerns.
The new price target is based on ~6x FY2027 EBITDA, down from ~6.5x previously. Despite the downgrade, shares have gained 14% over the past year.
