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Stanley Black Withdraws Annual View on Coronavirus Concerns

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Stanley Black & Decker, Inc. (SWK - Free Report) on Apr 2 provided a business update on the impacts of the coronavirus outbreak on its operations. Also, the company expects its healthy financial flexibility to help it overcome the uncertain environment.

It is worth mentioning here that the industrial tool maker’s share price increased 3.4% in the last two trading sessions. The closing trade price for the stock was $95.27 on Friday.

Inside the Headlines

Stanley Black has noted that the safety of its supply-chain partners and workers along with the continuity of businesses remains the top priority. In the current demand environment, adjustments will be done for manufacturing labor, supply chain and non-essential staffing. Also, the company intends on working toward lowering indirect spending and gaining from lower raw material price environment.

Also, it is lending all possible supports in the fight against the pandemic.

Considering the uncertainties, the company suspended its projection for 2020, predicting negative impacts of the coronavirus outbreak on its operations. Also, a temporary suspension of buyout activities was announced along with the intention of lowering capital spending.

Earlier, the company had expected adjusted earnings of $8.80-$9.00 per share for the year, suggesting an increase of 5-7% from the year-ago reported figure. The cost-saving program of 2019 was supposed to contribute 95 cents per share to earnings, while organic growth was expected to add 40-50 cents. Currency and tariff headwinds were to adversely impact earnings by 60-70 cents, while financing costs, tax rate and others were expected to lower earnings by 25 cents.

Organic growth was predicted to be 3% and free cash flow conversion was expected to be 90-100%.

Concurrently, the company communicated that it will release its first-quarter 2020 results on Apr 30, 2020, before the market opens.

For the quarter, the Zacks Consensus Estimate for its earnings per share is pegged at $1.22, reflecting a decline of 4.7% from the 60-day-ago figure. The consensus estimate for revenues is pegged at $3.33 billion.

Zacks Rank, Earnings Estimates and Price Performance

Stanley Black, with a market capitalization of $14.7 billion, currently carries a Zacks Rank #4 (Sell). In the past three months, the company’s shares have moved down 42.3% compared with the industry’s decline of 40.3%.




 

The Zacks Consensus Estimate for its earnings per share is pegged at $8.29 for 2020 and $9.34 for 2021, reflecting declines of 7.2% and 3.8% from the respective 60-day-ago figures.

Stanley Black & Decker, Inc. Price and Consensus

 

Stanley Black & Decker, Inc. Price and Consensus

Stanley Black & Decker, Inc. price-consensus-chart | Stanley Black & Decker, Inc. Quote

Stocks to Consider

Some better-ranked stocks in the Zacks Industrial Products sector are Tennant Company (TNC - Free Report) , Broadwind Energy, Inc. (BWEN - Free Report) and EnPro Industries, Inc. (NPO - Free Report) . While Tennant currently sports a Zacks Rank #1 (Strong Buy), both Broadwind Energy and EnPro Industries carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Current-year earnings estimates for the companies have remained stable over the past 30 days. Further, the trailing four-quarter positive earnings surprises for Tennant, Broadwind Energy and EnPro Industries were 26.60%, 10.42% and 1.98%, respectively, on average.

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