Stanley Black & Decker (SWK) Completes $1.8 Billion Sale of Aerospace Unit

Stanley Black & Decker (SWK) has successfully completed the sale of its aerospace business for $1.8 billion.

The sale of the aerospace unit was announced last December as management at Stanley Black & Decker announced they were trying to lower the company’s debt and improve the balance sheet. The company known mostly for its tools sold its aerospace manufacturing unit to airplane parts maker Howmet Aerospace (HWM) in an all-cash deal.

The unit sold by Stanley Black & Decker makes fasteners and engineered components for aerospace and defense manufacturers and fits well with the business of Howmet. Analysts have largely been supportive of the sale, saying it will help to reduce Stanley Black & Decker’s debt.

Stanley Black & Decker’s Turnaround Plan

Management at Stanley Black & Decker have said that offloading the aerospace business will help them focus more on the company’s core automotive fastener business, where it has a strong market position. The $1.8 billion of cash will also give the company more financial flexibility.

Some analysts, such as those at brokerage Jefferies Financial Group (JEF), have called on Stanley Black & Decker to undertake share buybacks once the sale of the aerospace unit to Howmet is finalized. Jefferies maintains a Buy rating on SWK stock.

Is SWK Stock a Buy?

Stanley Black & Decker’s stock has a consensus Hold rating among eight Wall Street analysts. That rating is based on three Buy, four Hold, and one Sell recommendations issued in the last three months. The average SWK price target of $89.00 implies 32% upside from current levels.