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Stanley Black Provides Strategic Update on Investor Day
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Industrial tool maker Stanley Black & Decker, Inc. (SWK - Free Report) provided a strategic update in its recently held Investor Day. It also reaffirmed its guidance for 2017.
Over the last three months, the company’s yielded a return of 8.09%, outperforming 6.46% gain recorded by the Zacks categorized Machine Tools & Related Products industry.
As part of its strategic update, Stanley Black & Decker revealed that it aims to become a well diversified industrial company, with revenue generation of approximately $22 billion by 2022. Total revenue is anticipated to grow roughly 10−12% (CAGR), including organic sales growth of 4−6% and acquisition revenues of roughly $6−$8 million. On a segmental basis, Industrial revenues will likely be in a $5−$6 billion range, Tools & Storage revenues within $12−$14 billion and Security revenues within $3−$4 billion.
Earnings per share are predicted to grow 10−12% or roughly 6−8% excluding acquisitions. Cash flow return on investments will be 12−15% while free cash flow will be greater than or equal to net income. Capital expenditure is anticipated to be 3−3.5% of net sales. In the years ahead, the company wishes to follow its 50/50 capital allocation strategy of acquisitions as well as reward shareholders. Dividend payout is predicted to be 30–35% in the long run.
In addition, Stanley Black & Decker reaffirmed its guidance for 2017. Earnings are still anticipated to be in a $7.08−$7.28 per share range. The projection includes anticipated earnings accretion from Newell Tools and Craftsman Brand acquisitions and earnings dilution from disposition of Mechanical Security businesses as well as improved industrial businesses.
Organic revenues are predicted to exceed 4% growth while total revenue will likely increase 7% to $12.2 billion. In addition, the company reaffirmed its projection of commodity inflation in the range of $50−$55 million and forex headwinds of $50 million. Free cash flow conversion is predicted to be 100%.
With a market capitalization of $20.95 billion, Stanley Black & Decker currently carries a Zacks Rank #2 (Buy). Other stocks worth considering in the machinery industry include Kennametal Inc. (KMT - Free Report) , Parker-Hannifin Corporation (PH - Free Report) and Lincoln Electric Holdings, Inc. (LECO - Free Report) . While both Kennametal and Parker-Hannifin sport a Zacks Rank #1, Lincoln Electric Holdings carries a Zacks Rank #2 (Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.
Kennametal’s earnings estimates for fiscal 2017 and fiscal 2018 were revised upward in the last 60 days. Also, the company’s average earnings surprise for the last four quarters was a positive 6.24%.
Parker-Hannifin’s average earnings surprise for the last four quarters was a positive 14.94%. Also, earnings expectations for fiscal 2017 and fiscal 2018 improved over the past 60 days.
Lincoln Electric Holdings’ earnings estimates for 2017 and 2018 were revised upward in the last 60 days. Also, the company’s average earnings surprise for the last four quarters was a positive 4.66%.
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Stanley Black Provides Strategic Update on Investor Day
Industrial tool maker Stanley Black & Decker, Inc. (SWK - Free Report) provided a strategic update in its recently held Investor Day. It also reaffirmed its guidance for 2017.
Over the last three months, the company’s yielded a return of 8.09%, outperforming 6.46% gain recorded by the Zacks categorized Machine Tools & Related Products industry.
As part of its strategic update, Stanley Black & Decker revealed that it aims to become a well diversified industrial company, with revenue generation of approximately $22 billion by 2022. Total revenue is anticipated to grow roughly 10−12% (CAGR), including organic sales growth of 4−6% and acquisition revenues of roughly $6−$8 million. On a segmental basis, Industrial revenues will likely be in a $5−$6 billion range, Tools & Storage revenues within $12−$14 billion and Security revenues within $3−$4 billion.
Earnings per share are predicted to grow 10−12% or roughly 6−8% excluding acquisitions. Cash flow return on investments will be 12−15% while free cash flow will be greater than or equal to net income. Capital expenditure is anticipated to be 3−3.5% of net sales. In the years ahead, the company wishes to follow its 50/50 capital allocation strategy of acquisitions as well as reward shareholders. Dividend payout is predicted to be 30–35% in the long run.
In addition, Stanley Black & Decker reaffirmed its guidance for 2017. Earnings are still anticipated to be in a $7.08−$7.28 per share range. The projection includes anticipated earnings accretion from Newell Tools and Craftsman Brand acquisitions and earnings dilution from disposition of Mechanical Security businesses as well as improved industrial businesses.
Organic revenues are predicted to exceed 4% growth while total revenue will likely increase 7% to $12.2 billion. In addition, the company reaffirmed its projection of commodity inflation in the range of $50−$55 million and forex headwinds of $50 million. Free cash flow conversion is predicted to be 100%.
Stanley Black & Decker, Inc. Price and Consensus
Stanley Black & Decker, Inc. Price and Consensus | Stanley Black & Decker, Inc. Quote
Zacks Rank & Key Picks
With a market capitalization of $20.95 billion, Stanley Black & Decker currently carries a Zacks Rank #2 (Buy). Other stocks worth considering in the machinery industry include Kennametal Inc. (KMT - Free Report) , Parker-Hannifin Corporation (PH - Free Report) and Lincoln Electric Holdings, Inc. (LECO - Free Report) . While both Kennametal and Parker-Hannifin sport a Zacks Rank #1, Lincoln Electric Holdings carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kennametal’s earnings estimates for fiscal 2017 and fiscal 2018 were revised upward in the last 60 days. Also, the company’s average earnings surprise for the last four quarters was a positive 6.24%.
Parker-Hannifin’s average earnings surprise for the last four quarters was a positive 14.94%. Also, earnings expectations for fiscal 2017 and fiscal 2018 improved over the past 60 days.
Lincoln Electric Holdings’ earnings estimates for 2017 and 2018 were revised upward in the last 60 days. Also, the company’s average earnings surprise for the last four quarters was a positive 4.66%.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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