The analyst firm also added the consumer products company to its Franchise Picks List.
Jefferies said it expects Newell Rubbermaid to report earnings of $2.20 a share for 2015. The analyst firm set its 2016 and 2017 EPS estimates for the company at $2.50 and $2.85 a share, respectively.
"We believe CEO Polk and team will continue to maximize value from what has historically been viewed by investors as a sub-par portfolio of disparate businesses," Jefferies analysts wrote. "We forecast 4-5% org sales growth for FY15-18, up from ~3% during FY11-14, as the co.'s investments in its "Win Bigger" businesses, EMs, and targeted M&A accelerate NWL's growth profile, placing it ahead of global staples peers in the 3-4% area."
Separately, TheStreet Ratings team rates NEWELL RUBBERMAID INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
We rate NEWELL RUBBERMAID INC (NWL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 12.5%. Since the same quarter one year prior, revenues slightly increased by 3.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Household Durables industry and the overall market, NEWELL RUBBERMAID INC's return on equity exceeds that of both the industry average and the S&P 500.
- 42.75% is the gross profit margin for NEWELL RUBBERMAID INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 9.51% is above that of the industry average.
- Net operating cash flow has slightly increased to $102.50 million or 6.54% when compared to the same quarter last year. In addition, NEWELL RUBBERMAID INC has also vastly surpassed the industry average cash flow growth rate of -88.51%.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: NWL