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Stanley Black Exhibits Strong Prospects Despite Persisting Headwinds
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Key Takeaways
Stanley Black saw 2% automotive and 7% industrial organic growth in second-quarter 2026.
Cost cuts lifted gross margin 620 bps and EBITDA margin 320 bps year over year.
Higher SG&A costs and currency risks remain headwinds despite dividend and share buyback plans.
Stanley Black & Decker, Inc. (SWK - Free Report) is benefiting from solid momentum in the Engineered Fastening segment, driven by persistent strength across the automotive and industrial markets. The automotive market continued to perform well, driven by healthy global fastener system sales and generated 2% organic growth in the second quarter of 2026. Also, the industrial market reported 7% year-over-year organic growth in the quarter.
SWK’s Tools & Outdoor segment is gaining from investments in innovation, brand activation and demand-generation initiatives across DEWALT, STANLEY and CRAFTSMAN brands. An increase in demand for power tools in U.S. retail and commercial and industrial (C&I) channels also bodes well.
Stanley Black wrapped up its multi-year global cost-reduction program in fourth-quarter 2025, implementing initiatives to resize the organization, optimize inventory, streamline the supply chain and improve profitability. The program achieved its financial targets, having generated roughly $2.1 billion in pre-tax run-rate savings, including incremental savings of $120 million in the fourth quarter of 2025. Approximately $1.5 billion of savings came from core supply-chain initiatives, including operational excellence, material productivity and complexity reduction. These actions continue to support profitability and operational efficiency. In second-quarter 2026, adjusted gross margin increased 620 basis points year over year to 33.7%, while adjusted EBITDA margin increased 320 basis points to 11.3%. In 2026, Stanley Black expects adjusted gross margin to increase approximately 150 basis points year over year.
Stanley Black is committed to rewarding its shareholders through dividend payments and share buybacks. In the first six months of 2026, the company paid $250.3 million in dividends, up from $248.5 million in the year-ago period. In July 2026, the company hiked its dividend by a penny to 84 cents per share (annually: $3.36 per share). Also, in April 2026, Stanley Black approved a new $500 million share repurchase program valid for 36 months, replacing the previous April 2022 program.
SWK’s Zacks Rank
In the past three months, this Zacks Rank #3 (Hold) company’s shares gained 2.7% against the industry’s 5.5% decline.
Image Source: Zacks Investment Research
However, Stanley Black is dealing with escalating expenses. In the second quarter of 2026, the company’s selling, general and administrative expenses increased 8.6% year over year. The metric, as a percentage of net sales, increased 180 basis points (bps) to 23.9% due to incremental costs and investments tied to tariff refunds received.
SWK’s international presence keeps it exposed to the risk of adverse currency fluctuations. This is because a strengthening U.S. dollar is likely to require the company to either raise prices or contract profit margins in locations outside the United States. Thus, adverse currency movements are a worry.
Stocks to Consider
Some better-ranked companies from the same space are discussed below:
The company delivered a trailing four-quarter average earnings surprise of 13.7%. In the past 60 days, the consensus estimate for GNRC’s 2026 earnings has increased 8.5%.
Crane Company (CR - Free Report) presently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter average earnings surprise of 10.4%.
The Zacks Consensus Estimate for CR’s 2026 earnings has increased 3.1% in the past 60 days.
Helios Technologies (HLIO - Free Report) currently carries a Zacks Rank of 2. HLIO delivered a trailing four-quarter average earnings surprise of 13.1%.
In the past 60 days, the Zacks Consensus Estimate for Helios Technologies’ 2026 earnings has increased 10%.
View the Zacks #1 Rank List
Image: Bigstock
Stanley Black Exhibits Strong Prospects Despite Persisting Headwinds
Key Takeaways
Stanley Black & Decker, Inc. (SWK - Free Report) is benefiting from solid momentum in the Engineered Fastening segment, driven by persistent strength across the automotive and industrial markets. The automotive market continued to perform well, driven by healthy global fastener system sales and generated 2% organic growth in the second quarter of 2026. Also, the industrial market reported 7% year-over-year organic growth in the quarter.
SWK’s Tools & Outdoor segment is gaining from investments in innovation, brand activation and demand-generation initiatives across DEWALT, STANLEY and CRAFTSMAN brands. An increase in demand for power tools in U.S. retail and commercial and industrial (C&I) channels also bodes well.
Stanley Black wrapped up its multi-year global cost-reduction program in fourth-quarter 2025, implementing initiatives to resize the organization, optimize inventory, streamline the supply chain and improve profitability. The program achieved its financial targets, having generated roughly $2.1 billion in pre-tax run-rate savings, including incremental savings of $120 million in the fourth quarter of 2025. Approximately $1.5 billion of savings came from core supply-chain initiatives, including operational excellence, material productivity and complexity reduction. These actions continue to support profitability and operational efficiency. In second-quarter 2026, adjusted gross margin increased 620 basis points year over year to 33.7%, while adjusted EBITDA margin increased 320 basis points to 11.3%. In 2026, Stanley Black expects adjusted gross margin to increase approximately 150 basis points year over year.
Stanley Black is committed to rewarding its shareholders through dividend payments and share buybacks. In the first six months of 2026, the company paid $250.3 million in dividends, up from $248.5 million in the year-ago period. In July 2026, the company hiked its dividend by a penny to 84 cents per share (annually: $3.36 per share). Also, in April 2026, Stanley Black approved a new $500 million share repurchase program valid for 36 months, replacing the previous April 2022 program.
SWK’s Zacks Rank
In the past three months, this Zacks Rank #3 (Hold) company’s shares gained 2.7% against the industry’s 5.5% decline.
Image Source: Zacks Investment Research
However, Stanley Black is dealing with escalating expenses. In the second quarter of 2026, the company’s selling, general and administrative expenses increased 8.6% year over year. The metric, as a percentage of net sales, increased 180 basis points (bps) to 23.9% due to incremental costs and investments tied to tariff refunds received.
SWK’s international presence keeps it exposed to the risk of adverse currency fluctuations. This is because a strengthening U.S. dollar is likely to require the company to either raise prices or contract profit margins in locations outside the United States. Thus, adverse currency movements are a worry.
Stocks to Consider
Some better-ranked companies from the same space are discussed below:
Generac Holdings Inc. (GNRC - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The company delivered a trailing four-quarter average earnings surprise of 13.7%. In the past 60 days, the consensus estimate for GNRC’s 2026 earnings has increased 8.5%.
Crane Company (CR - Free Report) presently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter average earnings surprise of 10.4%.
The Zacks Consensus Estimate for CR’s 2026 earnings has increased 3.1% in the past 60 days.
Helios Technologies (HLIO - Free Report) currently carries a Zacks Rank of 2. HLIO delivered a trailing four-quarter average earnings surprise of 13.1%.
In the past 60 days, the Zacks Consensus Estimate for Helios Technologies’ 2026 earnings has increased 10%.