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Snap-on (SNA)
NYSE:SNA
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Snap-on
(NYSE:SNA)
Rating:72Outperform
Price Target:
$353.00
▲(11.16%Upside)
Positive Factors
Aftermarket Resilience
The recession-resistant characteristics of the aftermarket business may provide a boost as new vehicle sales stall and elevated tariffs make them less affordable.
Operational Efficiency
Snap-on is increasingly leveraging AI across all facets of its operation, driving both new product development and operational efficiencies.
Product Innovation
Snap-on's ongoing product innovation combined with increasing software and data solutions will continue to drive a further acceleration in Business Performance trends.
Negative Factors
Market Challenges
The Tools Group was impacted by macroeconomic uncertainties that saw technicians accelerating their reluctance to purchase big-ticket financed products.
Military Market Impact
The C&I Group was impacted by lower sales to military markets due to contract delays stemming from a change in the U.S. administration.
Sales Decline
Snap-on’s Q1 financial results included a net sales decrease of 3.5% to $1.141 billion, including a decline in organic sales.
Snap-on (SNA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$16.61B
Dividend Yield2.69%
Average Volume (3M)331.83K
Price to Earnings (P/E)16.6
Beta (1Y)0.79
Revenue Growth-0.88%
EPS Growth0.04%
CountryUS
Employees13,000
SectorIndustrials
Sector Strength91
IndustryManufacturing - Tools & Accessories
Share Statistics
EPS (TTM)4.51
Shares Outstanding52,291,023
10 Day Avg. Volume270,979
30 Day Avg. Volume331,831
Financial Highlights & Ratios
PEG Ratio-7.59
Price to Book (P/B)2.90
Price to Sales (P/S)0.00
P/FCF Ratio14.77
Enterprise Value/Market Cap0.95
Enterprise Value/Revenue0.80
Enterprise Value/Gross Profit6.51
Enterprise Value/Ebitda2.65
Forecast
1Y Price Target
$327.25Price Target Upside3.05% Upside
Rating ConsensusHold
Number of Analyst Covering4
Snap-on Business Overview & Revenue Model
Company DescriptionSnap-on Incorporated is a leading global innovator, manufacturer, and marketer of tools, equipment, diagnostics, repair information, and systems solutions for professional users. The company primarily serves the automotive repair industry, offering a wide range of products including hand tools, power tools, tool storage solutions, and diagnostic equipment. Snap-on's products are known for their quality, durability, and innovation, catering to professionals in sectors such as automotive, aviation, agriculture, construction, and more.
How the Company Makes MoneySnap-on makes money through the design, manufacture, and sale of premium tools and equipment to professional users across various industries. The company's revenue streams are primarily divided into three segments: the Snap-on Tools Group, Commercial & Industrial Group, and Repair Systems & Information Group. The Snap-on Tools Group generates revenue by selling hand tools, power tools, and tool storage solutions directly to vehicle repair technicians and other professional users through a network of franchised mobile tool vans. The Commercial & Industrial Group serves a broader range of industries, providing tools, equipment, and system solutions to commercial and industrial customers. The Repair Systems & Information Group offers vehicle diagnostics, repair information systems, and software solutions, generating revenue through subscriptions and sales of diagnostic tools. Additionally, Snap-on benefits from strategic partnerships and continuous product innovation to maintain its competitive edge in the market.
Snap-on Earnings Call Summary
Earnings Call Date:Apr 17, 2025
(Q1-2025)
| % Change Since: -3.73%|
Next Earnings Date:Jul 17, 2025
Earnings Call Sentiment Negative
The earnings call highlights some strong areas such as the RSNI division and the positive impact of AI on database efficiency. However, the overall sentiment is overshadowed by significant challenges including a decline in organic sales, decreased tool storage demand, and external disruptions like weather and tariffs affecting technician confidence and consumer sentiment.Q1-2025 Updates
Positive Updates
Strong Performance in RSNI Division
RSNI organic sales rate was about 3.7%, and when excluding intercompany declines, it was in the 4% range. The software within RSNI saw a significant increase and the division had a strong quarter with profitability up nicely by 140 basis points to 25.7%.
Positive Impact of AI on Database Efficiency
AI and natural language processing have improved the efficacy of translating technician repairs into the database, enhancing the effectiveness of databases.
Advantageous Manufacturing Capacity
The expansion of manufacturing capacity, particularly in tool storage and lockers, positions the company well against tariffs, with reduced backlog issues.
Negative Updates
Overall Organic Sales Decline
Company experienced a 6.8% decline in organic sales, exacerbated by external factors such as tariffs, leading to a challenging period.
Decreased Tool Storage Demand
Tool storage demand significantly declined, with originations down 11.7% compared to the previous year.
Weather-Related Disruptions
Regional kickoffs were down due to several events being disrupted by snow, affecting participation and evaluation.
Technician Confidence and Consumer Sentiment
Technician confidence fell, influenced by uncertain economic conditions, leading to reduced demand in certain sectors.
Company Guidance
During the call, Snap-on provided guidance indicating a challenging first fiscal quarter for 2025, with organic sales down 6.8%. Despite this, the RS&I division showed strength, achieving an organic sales growth rate of approximately 4% when adjusted for intercompany declines. The division's profitability increased, with software playing a significant role, contributing to a 140 basis point improvement in margins to 25.7%. The Tools Group faced headwinds, particularly in tool storage, which saw an 11.7% decline in originations. Hand tools remained stable, but diagnostics sales, particularly lower-end models like the Solus, performed well. The company observed a 3.3% decline in technician hours worked, attributing it to reduced elective maintenance services. Despite uncertainties, particularly around tariffs, Snap-on expressed confidence in its pivot strategy toward lower-priced items, emphasizing ongoing product development and promotional efforts.Snap-on Financial Statement Overview
Summary
Snap-on demonstrates strong financial health with robust revenue growth, efficient operations, and solid cash flow generation. The balance sheet is strong with low leverage and a high return on equity. Minor cost pressures and stable free cash flow to net income ratio slightly temper the overall positive outlook.Income Statement
Snap-on has demonstrated strong revenue growth with a 3.0% increase in TTM over the previous year. The gross profit margin stands at 50.97%, indicating efficient cost management. The net profit margin is solid at 21.41%, and EBIT margin is robust at 27.45%, showcasing operational efficiency. However, a slight decline in EBIT from the previous year suggests potential cost pressures.83
Very Positive
Balance Sheet
Snap-on maintains a strong balance sheet with an equity ratio of 68.42%, indicating a high level of financial stability. The debt-to-equity ratio is low at 0.23, reflecting conservative leverage. Return on equity is impressive at 18.49%, highlighting effective use of shareholders' equity. However, a slight increase in total liabilities must be monitored.79
Positive
Cash Flow
The company's operating cash flow to net income ratio is strong at 1.14, indicating healthy cash generation relative to profits. Free cash flow growth is commendable, showcasing a 2.65% increase over the previous year. However, the free cash flow to net income ratio remains stable at 1.06, indicating limited growth in free cash flow relative to net income.76
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.77B | 4.71B | 5.11B | 4.49B | 4.25B | 3.59B |
| Gross Profit | 2.43B | 2.38B | 2.62B | 2.18B | 2.11B | 1.75B |
| EBITDA | 1.49B | 1.52B | 1.48B | 1.35B | 1.25B | 991.40M |
| Net Income | 1.02B | 1.04B | 1.01B | 911.70M | 820.50M | 627.00M |
Balance Sheet | ||||||
| Total Assets | 8.07B | 7.90B | 7.54B | 6.97B | 6.76B | 6.56B |
| Cash, Cash Equivalents and Short-Term Investments | 1.43B | 1.36B | 1.00B | 757.20M | 780.00M | 923.40M |
| Total Debt | 1.27B | 1.29B | 1.28B | 1.25B | 1.23B | 1.48B |
| Total Liabilities | 2.52B | 2.48B | 2.45B | 2.47B | 2.56B | 2.71B |
| Stockholders Equity | 5.52B | 5.39B | 5.07B | 4.48B | 4.18B | 3.82B |
Cash Flow | ||||||
| Free Cash Flow | 1.08B | 1.13B | 1.06B | 591.00M | 896.50M | 943.00M |
| Operating Cash Flow | 1.17B | 1.22B | 1.15B | 675.20M | 966.60M | 1.01B |
| Investing Cash Flow | -172.90M | -204.10M | -331.80M | -206.20M | -290.40M | -187.80M |
| Financing Cash Flow | -679.20M | -649.80M | -572.90M | -485.00M | -818.80M | -84.30M |
Snap-on Technical Analysis
Positive
317.57
Price Trends
317.29
Positive
321.78
Negative
326.65
Negative
Market Momentum
0.54
Negative
52.19
Neutral
70.36
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SNA, the sentiment is Positive. The current price of 317.57 is above the 20-day moving average (MA) of 313.37, above the 50-day MA of 317.29, and below the 200-day MA of 326.65, indicating a neutral trend. The MACD of 0.54 indicates Negative momentum. The RSI at 52.19 is Neutral, neither overbought nor oversold. The STOCH value of 70.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SNA.
Snap-on Risk Analysis
Snap-on disclosed 26 risk factors in its most recent earnings report. Snap-on reported the most risks in the "Ability to Sell" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Snap-on Peers Comparison
Overall Rating
UnderperformOutperform
Sector (71)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $11.91B | 49.24 | 8.51% | ― | 4.87% | 19.66% | |
76 Outperform | $12.44B | 27.49 | 34.83% | 1.35% | -2.29% | -14.49% | |
74 Outperform | $5.50B | 16.96 | 11.85% | 1.78% | -3.69% | -11.76% | |
72 Outperform | $16.61B | 16.62 | 19.15% | 2.69% | -0.88% | 0.04% | |
72 Outperform | $11.43B | 31.37 | 4.03% | 4.50% | -3.04% | ― | |
71 Outperform | $1.88B | 17.85 | 8.69% | 3.24% | -2.93% | 2.74% | |
71 Outperform | ¥254.21B | 13.40 | 8.49% | 3.03% | 6.33% | 12.89% |
* Industrials Sector Average
Performance Comparison
SNA
Snap-on
317.57
53.58
20.30%
KMT
Kennametal
24.70
1.03
4.35%
LECO
Lincoln Electric Holdings
222.78
25.40
12.87%
RBC
RBC Bearings
378.24
83.46
28.31%
SWK
Stanley Black & Decker
72.87
-10.65
-12.75%
TKR
Timken Company
78.07
-4.90
-5.91%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.