Citi Pivots to Household Care for 2026 Favoring Newell Brands (NWL) as Inventory Destocking and Negative Comparisons End

Newell Brands Inc. (NASDAQ:NWL) is one of the cheap penny stocks to invest in. On December 17, Citi raised the firm’s price target on Newell Brands to $3.75 from $3.50 while keeping a Neutral rating on the shares. Citi is recalibrating its focus for 2026, moving away from the bullish stance it held on non-alcoholic beverages in 2025. The firm now favors household and personal care stocks, citing a stronger fundamental outlook. This optimism is driven by the end of inventory destocking cycles and more favorable year-over-year consumption comparisons.

Earlier on December 2, UBS lowered the firm’s price target on Newell Brands to $4 from $5.50, while maintaining a Neutral rating on the shares. In a research note to investors, the firm explained that it is remaining on the sidelines, seeking greater clarity on market conditions before adopting a more positive stance on the company.

Additionally, in Q3 2025,  Newell Brands recorded net sales of $1.8 billion, which was a 7.2% year-over-year decline, with core sales dropping 7.4%. These results fell short of expectations due to significant retailer inventory destocking and unreciprocated pricing actions taken to offset $180 million in incremental cash tariff costs. Despite the top-line pressure, the company achieved a net income of $21 million, which was a major swing from the $198 million net loss in the prior year, and reported normalized diluted EPS of $0.17

Looking ahead, Newell Brands is preparing for a return to growth in 2026, fueled by a pipeline of over 20 Tier 1 and Tier 2 product innovations. On December 1, the company announced a global productivity plan to cut its workforce by 10% (over 900 employees), aiming for annual savings of up to $130 million. For the full year 2025, the company expects net sales to decline 4.5% to 5%, with normalized EPS projected between $0.56 and $0.60.

Newell Brands Inc. (NASDAQ:NWL) designs, manufactures, sources, and distributes consumer and commercial products worldwide. The company operates in three segments: Home & Commercial Solutions, Learning & Development, and Outdoor & Recreation.

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Disclosure: None. This article is originally published at Insider Monkey.