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New Britain, Connecticut-based Stanley Black & Decker, Inc. (SWK) provides hand tools, power tools, outdoor products, related accessories, engineered fastening systems, and several other items and services. With a market cap of $13.5 billion, the company's operations span the Americas, Europe, and Asia.
Stanley Black & Decker has lagged behind the broader market over the past year by a huge margin. SWK stock has declined 10.8% on a YTD basis and gained 2.8% over the past 52-week period compared to the S&P 500 Index’s ($SPX) 25.5% gains in 2024 and 35.5% returns over the past year.
Zooming in further, SWK also underperformed the Industrial Select Sector SPDR Fund’s (XLI) 24.5% gains on a YTD basis and 38.4% returns over the past year.
Despite reporting better-than-expected earnings, shares of Stanley Black & Decker plummeted 8.8% after the release of its Q3 results on Oct. 29. The company's focus on accelerating the operations and supply chain transformation to improve fill rates and better match inventory with customer demand has improved efficiency and led to a massive improvement in profitability. SWK reported a staggering 16.9% year-over-year growth in adjusted net earnings from continuing operations, reaching $185 million. Moreover, its adjusted EPS of $1.22 for the quarter surpassed analysts’ earnings by a notable 18.5%.
However, the company observed a 5.1% year-over-year and 6.8% quarter-on-quarter decline in net sales to $3.8 billion, due decline in volumes, currency impact, and divestiture of infrastructure business, making investors jittery.
For the current fiscal year, ending in December, analysts expect SWK to report a 184.8% year-over-year growth in adjusted EPS to $4.13. Moreover, SWK has a robust earnings surprise history. It surpassed Wall Street’s earnings estimates in each of the past four quarters.
SWK has a consensus “Hold” rating overall. Out of the 15 analysts covering the stock, four recommend “Strong Buy,” nine advise “Hold,” and two suggest “Strong Sell” rating.
This configuration has been mostly stable over the past three months.
On Oct. 31, Baird analyst Timothy Wojs maintained a “Neutral” rating while lowering the price target to $102.
SWK’s mean price target of $105.09 represents a premium of 20.1% to current price levels. Meanwhile, the Street-high target of $135 suggests a potential upside of 54.3%.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
