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Kenosha, Wisconsin-based Snap-on Incorporated (SNA) is a designer, manufacturer, and marketer of tools and equipment for professional use in the transportation industry. With a market cap of $15 billion, Snap-on operates through Commercial & Industrial Group, Snap-on Tools Group, Repair Systems & Information Group, and Financial Services segments.
Companies valued at $10 billion or more are generally considered "large-cap" stocks, and Snap-on fits this criterion perfectly, signifying its substantial size, stability, and influence in the industrial sector. Its diversified revenue streams, including tools, diagnostics, equipment, and a resilient financial services segment, mitigate market volatility risks.
Additionally, Snap-on's brand is synonymous with quality, supported by franchisee-operated mobile vans that enhance market penetration and customer engagement. This unique business model fosters loyalty by allowing franchisees to extend credit to technicians, ensuring adaptability to market demands.
SNA shares are trading 3% below their 52-week high of $298.49, which they hit on March 28. SNA has gained 10.6% over the past three months, matching the performance of the Industrial Select Sector SPDR Fund (XLI), which has also risen by 10.6% over the same time frame.
However, in the long term, XLI outperforms SNA, which has seen only a marginal rise in 2024. SNA shares have returned 14.4% over the past 52 weeks, while the XLI has gained 18.1% in 2024 and surged 33.7% over the last year.
Despite its underwhelming momentum in 2024, SNA has been trading above its 50-day and 200-day moving average since early September, indicating a recent bullish trend.
Shares of Snap-on dipped 1.9% following its Q2 earnings release on Jul. 18 as the company failed to surpass both its topline and bottom-line estimates.
SNA competes with industry giant Stanley Black & Decker Inc. (SWK), staying competitive through its strong focus on R&D. Notably, Stanley Black & Decker has outpaced SNA, with 10.4% returns in 2024 and has surged 31.9% over the past year.
Considering its underperformance relative to XLI and industry peers this year, analysts are cautious about SNA's prospects. The stock has a consensus rating of "Hold" from 11 analysts in coverage. The mean price target of $297.50 reflects a 2.8% premium over current price levels.
On the date of publication, Kritika Sarmah 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.
