Newell Brands (NWL) is expected to report Q1 results later this week broadly in line with consensus expectations, although weakening consumer sentiment, particularly in the US, appears to be pressuring sales in key categories, analysts at RBC Capital Markets said on Monday.

Recent scanner data show a deceleration in Newell's Baby and Writing businesses, both important high-margin segments, the analysts said. They noted that softening consumer attitudes could weigh on the company's discretionary product sales, with the risk of a potential recession adding further pressure.

Management's post-earnings commentary is also likely to address the impact of tariffs and escalating trade tensions, which remain a major concern for investors. RBC pointed out that Newell's full-year 2025 guidance did not initially incorporate the effects of tariffs, and about 15% of the company's cost of goods sold is sourced from China.

Currency movements will also play a role in the quarter's results, RBC said, with earlier US dollar strength likely pressuring sales and margins in Q1. However, more recent weakening of the dollar could soften the headwind somewhat.

Investor sentiment around Newell remains fragile. The stock, which declined sharply after mixed Q4 results and a cautious 2025 outlook, is trading at about a 50% discount to its peers, and short interest has risen to roughly 23%, the analysts said.

"We think the harsh reaction to Q4 earnings was largely overblown, and while still early days we don't think the company is getting much credit for the progress made since its new strategy was implemented," the RBC analysts said.

"At the same time, we think investors will continue to struggle to get constructive on the name given headwinds like consumer weakness, tariffs, and FX (foreign exchange), they said.

RBC has a sector perform rating on the company's stock with a $9 price target.

Newell shares recently were 1.8% higher during Monday afternoon trading.

Price: 5.10, Change: +0.09, Percent Change: +1.80