We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Stanley Black & Decker's Solid Potential Dimmed by Risks
Read MoreHide Full Article
We have issued an updated research report on Stanley Black & Decker, Inc. (SWK - Free Report) on Dec 12, 2016. The company manufactures tools and engineered security solutions across the globe. It currently has market capitalization of approximately $18.2 billion.
Post the release of third-quarter 2016 results on Oct 27, shares of the company yielded 4.8% return, underperforming the return of 11.1% generated by the Zacks categorized Machine Tools & Related Products industry.
We believe Stanley Black & Decker is exposed to near-term headwinds like increasing expenses, huge debt level and active competition in all businesses. Also, the company is exposed to risks arising from international expansion of businesses including adverse impacts of foreign currency translations and other geopolitical issues.
In addition, Stanley Black & Decker’s segmental performance and its overall profitability are largely influenced by industrial activities and the housing markets of the U.S., as well as by economic activities of the foreign countries served. For the Industrial segment, organic revenue is predicted to decline in the mid-single digits in 2016.
Despite such headwinds, we believe that Stanley Black & Decker has solid growth potential, backed by its strategy of shifting its business portfolio toward favored growth markets. For 2016, the company revised its earnings per share guidance to $6.40−$6.50 from $6.30−$6.50 projected earlier. The mid-point of the new guidance is at $6.45 versus the previous mid-point of $6.40, driven by improved performance in the Tools & Storage segment and better profitability in the Security segment, partially offset by weakness in the Industrial segment. On a segmental basis, organic revenues are projected to increase in high-single digit range for Tools & Storage segment and in low-single digits for Security segment.
Stanley Black & Decker believes in acquiring meaningful businesses for expansion. In Oct 2016, the company agreed to acquire the tools business of Newell Brands, known as Newell Tools. The acquisition will add incremental earnings of 15 cents per share in year one after the closing of the transaction (expected in first-half 2017), while this will likely increase to 50 cents per share by year three. Also, the acquisition is expected to yield annual cost synergies of approximately $80–$90 million by year three.
In addition, investments for product portfolio improvement, internal growth and rewarding shareholders through dividends payments and share buybacks remain a priority for Stanley Black & Decker.
Stanley Black & Decker currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the machinery industry include Enersys Inc. (ENS - Free Report) , II-VI Incorporated and Applied Industrial Technologies, Inc. (AIT - Free Report) . While Enersys and II-VI Incorporated sport a Zacks Rank #1 (Strong Buy), Applied Industrial Technologies carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Enersys Inc’s earnings estimates for fiscal 2017 improved over the last 60 days. It has an average positive earnings surprise of 3.01% for the trailing four quarters.
II-VI Incorporated reported better-than-expected results in the last four quarters, with a positive average earnings surprise of 39.80%. Also, bottom-line expectations for fiscal 2017 and fiscal 2018 have improved over the past 60 days.
Applied Industrial Technologies’ earnings estimates for fiscal 2017 and fiscal 2018 have been revised upward over the last 60 days. Average earnings surprise for the last four quarters is a positive 4.93%.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Stanley Black & Decker's Solid Potential Dimmed by Risks
We have issued an updated research report on Stanley Black & Decker, Inc. (SWK - Free Report) on Dec 12, 2016. The company manufactures tools and engineered security solutions across the globe. It currently has market capitalization of approximately $18.2 billion.
Post the release of third-quarter 2016 results on Oct 27, shares of the company yielded 4.8% return, underperforming the return of 11.1% generated by the Zacks categorized Machine Tools & Related Products industry.
We believe Stanley Black & Decker is exposed to near-term headwinds like increasing expenses, huge debt level and active competition in all businesses. Also, the company is exposed to risks arising from international expansion of businesses including adverse impacts of foreign currency translations and other geopolitical issues.
In addition, Stanley Black & Decker’s segmental performance and its overall profitability are largely influenced by industrial activities and the housing markets of the U.S., as well as by economic activities of the foreign countries served. For the Industrial segment, organic revenue is predicted to decline in the mid-single digits in 2016.
Despite such headwinds, we believe that Stanley Black & Decker has solid growth potential, backed by its strategy of shifting its business portfolio toward favored growth markets. For 2016, the company revised its earnings per share guidance to $6.40−$6.50 from $6.30−$6.50 projected earlier. The mid-point of the new guidance is at $6.45 versus the previous mid-point of $6.40, driven by improved performance in the Tools & Storage segment and better profitability in the Security segment, partially offset by weakness in the Industrial segment. On a segmental basis, organic revenues are projected to increase in high-single digit range for Tools & Storage segment and in low-single digits for Security segment.
Stanley Black & Decker believes in acquiring meaningful businesses for expansion. In Oct 2016, the company agreed to acquire the tools business of Newell Brands, known as Newell Tools. The acquisition will add incremental earnings of 15 cents per share in year one after the closing of the transaction (expected in first-half 2017), while this will likely increase to 50 cents per share by year three. Also, the acquisition is expected to yield annual cost synergies of approximately $80–$90 million by year three.
In addition, investments for product portfolio improvement, internal growth and rewarding shareholders through dividends payments and share buybacks remain a priority for Stanley Black & Decker.
Stanley Black & Decker currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the machinery industry include Enersys Inc. (ENS - Free Report) , II-VI Incorporated and Applied Industrial Technologies, Inc. (AIT - Free Report) . While Enersys and II-VI Incorporated sport a Zacks Rank #1 (Strong Buy), Applied Industrial Technologies carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Enersys Inc’s earnings estimates for fiscal 2017 improved over the last 60 days. It has an average positive earnings surprise of 3.01% for the trailing four quarters.
II-VI Incorporated reported better-than-expected results in the last four quarters, with a positive average earnings surprise of 39.80%. Also, bottom-line expectations for fiscal 2017 and fiscal 2018 have improved over the past 60 days.
Applied Industrial Technologies’ earnings estimates for fiscal 2017 and fiscal 2018 have been revised upward over the last 60 days. Average earnings surprise for the last four quarters is a positive 4.93%.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>