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Snap-on Inc.

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Snap-on has an impressive earnings surprise trend that continued in third-quarter 2018. Moreover, the bottom line grew year over year in the quarter, benefiting from Snap-on’s robust business model and focus on value-creation processes. Going ahead, management expects these encouraging prospects to continue. It also expects to leverage on capabilities in the automotive repair area, besides strengthening overall professional customer base. However, the stock has underperformed the industry in the past six months. This can be attributed to the company’s sluggish Tools Group division, which remains a major headwind. Lower sales at its International franchise business hurt the segment. Further, the company witnessed soft sales in the third quarter due to adverse impacts from currency. Volatility in raw-material prices and stiff competition are additional woes. Estimates have been lately stable ahead of fourth-quarter earnings.


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