Newell Brands (NWL) stock surged 5.02% in pre-market trading on Thursday, following the release of its first-quarter 2025 earnings report and conference call. The company's strong performance and strategic positioning in the face of tariff challenges have boosted investor confidence.

During the earnings call, Newell reported results that were in line or ahead of expectations across key financial metrics. The company's core sales decreased by 2.1%, which was at the high end of its guidance range. Notably, Newell achieved a 150 basis point increase in normalized gross margin to 32.5%, marking the seventh consecutive quarter of year-over-year improvement.

Investors were particularly encouraged by Newell's strong positioning against potential tariff impacts. The company highlighted its significant U.S. manufacturing base, with over half of its 2024 U.S. sales manufactured through an extensive North America supply chain. This positions Newell advantageously compared to competitors who rely heavily on imports from China.

Christopher Peterson, President and CEO of Newell Brands, stated, "We believe that the number of opportunities we have in advantaged categories where we have domestic or USMCA compliant production exempt from tariffs significantly exceeds the number of categories where we are disadvantaged."

The company also outlined its strategies to mitigate the potential impact of the recently announced 125% tariff on Chinese imports, particularly in its baby gear category. These strategies include accelerating inventory purchases, pausing new orders from China, and exploring pricing actions.

Adding to the positive sentiment, Barclays analyst Lauren Lieberman raised the firm's price target on Newell Brands to $9 from $8, maintaining an Overweight rating. This upgrade appears to have outweighed the impact of Wells Fargo's decision to cut its target price to $5 from $6.

While challenges remain, particularly in the dynamic macroeconomic environment, Newell's demonstrated ability to navigate tariff issues and its potential for market share gains in key categories have fueled investor optimism, driving the stock's significant pre-market rally.