Newell Brands' Q2 2025 Earnings: A Tipping Point for a Struggling Consumer Goods Giant?

The market has long treated Newell Brands (NWL) as a cautionary tale in the consumer goods sector. Once a titan of household and office products, the company has faced relentless pressure from e-commerce disruptions, shifting consumer preferences, and margin compression. Yet, as the Q2 2025 earnings report looms on August 1, 2025, a quiet but intriguing case is emerging for a potential turnaround. The question is not just whether Newell can beat expectations, but whether it can justify a “buy” rating in a market that has grown skeptical of its long-term narrative.

The Earnings Outlook: A Narrow Path to a Surprise

Analysts expect Newell to report earnings per share (EPS) of $0.24 for Q2 2025, a 33.3% decline year-over-year. Revenue is projected at $1.94 billion, down 4.4% from $1.95 billion in the same period in 2024. These numbers reflect a company still grappling with structural challenges—shrinking retail footprints, the rise of private-label competitors, and the lingering effects of its 2020 spinoff from Jarden.

However, the Zacks Earnings Surprise Potential (ESP) model adds a layer of intrigue. With a +6.28% positive surprise potential, the model suggests Newell could outperform the consensus estimate. This isn't mere optimism: the company has beaten earnings expectations in three of the past four quarters, including a Q1 2025 result that exceeded the $0.07-per-share consensus by $0.06, despite a 5.3% revenue decline. If Newell can replicate this performance, it would signal that cost discipline and operational efficiency are finally offsetting top-line weakness.

Institutional Confidence vs. Analyst Caution

The stock's recent price action—up 1.95% on July 25 to $6.27—hints at a tug-of-war between institutional confidence and retail skepticism. Goldman Sachs, RBC, and UBS have all increased their holdings by double-digit percentages in the first quarter of 2025, signaling a belief in Newell's long-term capital structure adjustments. The company's recent $2.25 billion debt offering, while costly, is aimed at refinancing near-term obligations and reducing leverage, a move that could stabilize its balance sheet for 2026 and beyond.

Yet analyst ratings remain split. A “Hold” average rating, with six firms recommending caution and four advocating a “Buy,” underscores the uncertainty. JPMorgan's upgrade to “Overweight” and Barclays' raised price target to $9.00 suggest a small but growing contingent of analysts sees value in the stock's depressed valuation. At a forward P/E ratio of -10.63 and a market cap of $2.62 billion, Newell trades at a discount to its peers, but the question remains: Is this a bargain or a trap?

The Case for a Near-Term Upside

The data points to a plausible, if narrow, path for a positive earnings surprise. A 6.28% upward revision to the $0.24 consensus would push actual EPS to $0.25, a number that, while still below 2023 levels, would validate the company's cost-cutting initiatives. Such a result could trigger a short-term rally, particularly if Newell provides a more optimistic outlook for 2025.

Moreover, the stock's institutional ownership (92.50%) and recent upgrades by major banks indicate that large investors are hedging their bets. For retail investors, the risk-reward calculus hinges on timing. If the earnings report confirms progress—whether through improved margins, better inventory management, or a pivot toward higher-margin categories like digital-enabled products—Newell could see a re-rating.

Conclusion: A High-Risk, High-Reward Play

Newell Brands is not a stock for the faint of heart. Its challenges are structural, and its revenue declines are unlikely to reverse overnight. However, for those willing to take a contrarian position, the Q2 2025 report could be a pivotal moment. A beat of the $0.24 consensus, combined with a positive guidance revision, might justify a “Buy” rating in the near term, particularly if the stock trades above $7.50 post-earnings.

Investors should monitor two key metrics: the actual EPS result and the company's commentary on margin expansion. If Newell can demonstrate that it is not just surviving but adapting to the new retail landscape, the stock's 56% discount to the average price target of $7.94 could narrow. But if the earnings miss and guidance is cut, the bear case remains intact.

In the end, Newell Brands' story is one of resilience and reinvention. Whether Q2 2025 is the turning point or another false start remains to be seen.