Newell Brands (NWL) faces potential pressure on earnings per share from China tariffs, Morgan Stanley analysts said in a Monday note, adding that category risk from macro factors could weigh on the company's topline.

Commenting on the company's Q1 results, Morgan Stanley said the results were "solid" but that the Q2 guidance was "well below" consensus forecasts.

Newell Brands previously reported it swung to a Q1 normalized loss of $0.01 per diluted share from breakeven a year earlier, while quarterly net sales fell to $1.57 billion from $1.65 billion. The company said it expects Q2 normalized EPS in the range of $0.21 to $0.24.

The company "generally has lower exposure than its competitors to tariffs, which could lead to topline opportunities as retailers look for alternative sources," the investment firm said.

According to Morgan Stanley, Newell is in talks over potentially "providing greater sourcing" to retailers on 19 product categories. However, visibility remains low and consumer demand for the company's semi-discretionary portfolio is uncertain, Morgan Stanley analysts said.

Morgan Stanley lowered its price target to $5.80 from $8.50, while reiterating its equalweight rating on the stock.

Shares were down 1.2% in recent trading.

Price: 5.19, Change: -0.07, Percent Change: -1.24