Newell Brands (NWL) management has a solid roadmap to overcome tariffs but faces headwinds from faltering consumer demand and muted macroeconomic outlook, RBC Capital Markets said in a Thursday note.

The company can "fully offset" the impacts of tariffs through targeted pricing actions, cost optimization and rapid sourcing decisions, according to the analysts.

Management is of the view that the company is poised to "disproportionately benefit" from the dynamic global trade realignment as it has diversified goods procurement beyond China and invested in a domestic manufacturing base to boost production capability, according to RBC.

The company's fiscal 2025 guidance does not reflect the 125% tariff on China, given questions on sustainability and the dynamic nature of the development, which could translate to a negative $0.10 headwind to EPS, the analysts said.

RBC said it adjusted its full-year 2025 core sales and net sales growth estimates to -3% and -3.6%, respectively, considering Q1 results and management tempering guidance. Meanwhile, it retained its EPS estimate of $0.74 on the belief that the company will implement cost-saving strategies and boost productivity to offset looming headwinds.

RBC reiterated its sector perform rating on the stock and reduced its price target to $8 from $9.

Shares of the company rose more than 8% in recent Thursday activity.

Price: 5.20, Change: +0.42, Percent Change: +8.68