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Stanley Black & Decker (SWK)

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Stanley Black & Decker's (SWK) third quarter 2012 results were mixed with earnings per share of $1.40, rising above the year-ago earnings by 5.3% but falling short of the Zacks Consensus Estimate of $1.45. Europe remained a drag on results and largely was the reason behind management's lowered guidance. Currency also remains a headwind.

All these support our Underperform recommendation on the stock. Lowered 2012 guidance on the back of negative currency translation impacts, drag from European exposure and active competition in all businesses limit the company's growth prospects in the near term.

Thus, anticipating a lack of share driving catalysts, we currently maintain an Underperform recommendation on the stock. The stock currently has a target price of $61.00, at a 2012 P/E of 11.6x.

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