Citi Has Buy Rating, $22 Price Target On Newell Rubbermaid Inc (NWL)

Citi Investment Research has a Buy rating and a $22 price target on shares of Newell Rubbermaid Inc NWL after it reported earnings. In a note to clients, Citi writes, "In 1Q11, NWL delivered a sales decline of 0.3% (vs. our forecast of +2.4%). Core sales growth declined 1.7% and f/x added 1.4% (we had modeled core sales growth of 1.5% and an f/x boost of 0.9%). NWL attributed this sales miss both to timing issues (higher sales in 4Q10 by certain customers to achieve volume rebates) as well as due to both consumer trade down and lower promotional activity. We note that the Home & Family business was most affected, with local currency sales -5.1%, while Tools was flat and Office Products grew 1.7%. Regionally, sales for NWL's Latin American business was +21.5% and Asia +7.2%, while Europe fell 1.1% and the U.S. declined 4.0% (all in local currency). Interestingly, despite the 1Q11 weakness in sales, NWL has maintained its core currency sales growth target of 4%-5% for the year (suggesting a very back-end loaded year, though we note that NWL faces considerably easier comps ahead, relative to the 6% local currency growth comp they faced from 1Q10 when sales were inflated owing to customer pre-buy ahead of SAP)." Shares of NWL are down 48 cents to $19.25, a loss of 2.4%.