Newell Brands ( NASDAQ: NWL ) stock slid sharply on Monday after Barclays moved to a bearish stance.
The bank’s analysts moved to an “Underweight” rating from a prior “Equal-Weight” due to concerns on the demand environment moving into 2023. Equity analyst Heather Gornik pointed to past underperformance during recessions and a burdensome debt load as key problems.
“Although the past isn't a precise model for the future, we are all too familiar with how challenged the businesses in Newell's portfolio can become during a recession,” she told clients on Monday. “While NWL's difficulties during the Great Financial Crisis had more to do with a string of acquisitions heading into that period, the Jarden business proved deeply susceptible to changes in consumer demand & retailer order patterns at that time. Then, as is the case for the company today, that was despite best efforts to proactively pull back on supply plans and cash flow & balance sheet ratios suffered.”
As such, she moved her rating to a Sell-equivalent and cut her price target to $11 from $16. Shares of the Atlanta-based manufacturer of Coleman Outdoor, Yankee Candle, and Mr. Coffee products fell 3.79% shortly before Monday’s open.
Read more on the company’s earnings results reported on Friday .
For further details see:
Newell Brands downgraded at Barclays on profitability problems