Newell Rubbermaid (NWL): Reiterate Top Pick - Jefferies
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Jefferies analyst, Kevin Grundy, reiterated his Buy rating on shares of Newell Rubbermaid (NYSE: NWL) and sees a path for the brand to double to ~$2B in sales over the next 6-7 years (> 10% CAGR), driving a ~50 bps upward revision to Street sales est. A shift to local production in Prague for YC is also an under-appreciated OM % driver.
Our regional market analysis suggests Yankee Candle can double by FY22, including ~70% coming from NA, where NWL seems keenly focused. Brand extensions into adjacent categories are supportive of our f-cast, including a ~100 bps p.a. contribution to YC's org sales growth from air fresheners with early shelf space wins at WMT. The bull case suggests a 350 basis point expansion opportunity.
No change to above consensus FY17-18 estimates or the $66 PT.
Shares of Newell Rubbermaid closed at $49.67 yesterday.
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