) to sell from neutral.
Analyst William Steel says Newell is projected to have taken almost $1.3 billion in after-tax charges from 2001 through 2004. This represents 85% of net income and 40% of cash flow over that time. He notes that $1.15 2001 GAAP EPS is projected to fall to 88 cents in 2004. Also, he notes cash flow from operations has fallen 26%, from $903 million in 2001 to a projected $665 million in 2004.
Steel contends its market multiple is too high. While his estimates are below guidance, he still finds that an 18 multiple for a company with little organic sales growth, falling EPS, and lower cash flow is not a value. He cut his $22 price target to $19.