Wells Fargo Upgrades Newell Rubbermaid (NWL) to Outperform
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Wells Fargo upgraded Newell Rubbermaid (NYSE: NWL) from Market Perform to Outperform with a price target of $33.00 (from $25.00).
Analyst Bonnie Herzog comments "...we believe the setup is good for NWL shares looking forward, with greater potential upside than downside risk over the next 12 months. Overall, our upgrade is more of an event-driven break-up call vs. a fundamental improvement call. Our detailed, break-up analysis suggests the targeted $10B after-tax proceeds from the planned divestitures could prove conservative as it implies just a 10-11x pre-tax (or 9.6x after-tax) EV/EBITDA multiple. We
estimate “new NWL” FY19 EPS of $2.76."
The analyst says the current valuation does not reflect the underlying value of the company, a "new Newell" would be fundamentally more attractive, NT challenges appear priced in, and he expects little disruption from the Board battle.
Shares of Newell Rubbermaid closed at $26.25 yesterday.
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