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Stanley Black & Decker (SWK)
NYSE:SWK
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Stanley Black & Decker
(NYSE:SWK)48Neutral
Positive Factors
China tariffs impact
Actual China tariffs of 10% incremental vs prior expectations of 60% have a positive impact on the valuation setup.
Transformation completion
SWK has orchestrated a comprehensive transformation since mid-'22 which substantially culminates in '25, so execution risk from 'heavy lifting' is largely in the rearview.
Negative Factors
Earnings guidance
SWK guides adj EPS of US$5.25 (+/- US$0.5), which was below consensus estimates of US$5.52 per VisibleAlpha.
Stanley Black & Decker (SWK) vs. S&P 500 (SPY)
Market Cap
$12.58B
Dividend Yield4%
Average Volume (3M)2.02M
Price to Earnings (P/E)43.0
Beta (1Y)1.22
Revenue Growth-2.63%
EPS GrowthN/A
CountryUS
Employees48,500
SectorIndustrials
Sector Strength66
IndustryIndustrial Goods
Share Statistics
EPS (TTM)1.89
Shares Outstanding154,413,960
10 Day Avg. Volume1,691,273
30 Day Avg. Volume2,020,354
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.84
Price to Cash Flow (P/CF)4.00
P/FCF Ratio3.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$102.00Price Target Upside21.97% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
Stanley Black & Decker Business Overview & Revenue Model
Company DescriptionStanley Black & Decker, Inc. (SWK) is a leading global diversified industrial company that operates in three main segments: Tools & Storage, Industrial, and Security. The company is renowned for its robust portfolio of iconic brands, including DEWALT, Stanley, Black+Decker, and Craftsman, among others. Stanley Black & Decker provides a wide range of products and solutions spanning hand tools, power tools, and related accessories, as well as engineered fastening systems and security solutions for both commercial and residential applications.
How the Company Makes MoneyStanley Black & Decker generates revenue primarily through the sale of tools and storage products, which is the largest segment and includes hand tools, power tools, and accessories under various brand names. The Industrial segment contributes to the company's revenue by offering engineered fastening systems and infrastructure solutions, targeting automotive, industrial, and construction industries. The Security segment provides electronic security systems, healthcare solutions, and monitoring services. The company's earnings are also bolstered by strategic acquisitions, brand licensing agreements, and a strong global distribution network that expands its market reach. Additionally, Stanley Black & Decker engages in research and development to innovate and enhance its product offerings, further driving sales growth.
Stanley Black & Decker Financial Statement Overview
Summary
Stanley Black & Decker faces financial challenges, particularly in declining revenues and equity depletion. Although recent improvements in net income and cash flow generation are promising, the company's financial health is precarious due to zero stockholders' equity and fluctuating operational efficiency. The company's ability to sustain positive cash flows amidst these challenges will be crucial for future stability.Income Statement
The income statement shows a declining revenue trend over recent years, with a drop from $16.95 billion in 2022 to $15.37 billion in 2024. Gross profit margins have decreased, indicating cost pressures. Net income turned positive in 2024, recovering from a loss in 2023, but EBIT and EBITDA margins are under pressure, suggesting challenges in operational efficiency.45
Neutral
Balance Sheet
The balance sheet indicates a concerning financial position with zero stockholders' equity in 2024, suggesting financial instability. The debt-to-equity ratio is undefined due to non-existent equity, and the equity ratio is also unfavorable. The company has no long-term debt in 2024, which could be positive if it were not for the lack of equity.30
Negative
Cash Flow
The cash flow statement shows a robust free cash flow in 2024, highlighting improvements in cash generation. Operating cash flow remains strong, and the free cash flow to net income ratio is healthy. However, past volatility in cash flows and negative free cash flow in 2022 warrant caution.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 15.37B | 15.78B | 16.95B | 15.62B | 14.53B | Gross Profit |
| 4.51B | 4.10B | 4.28B | 5.19B | 4.97B | EBIT |
| 286.30M | 620.30M | 956.90M | 1.82B | 1.47B | EBITDA |
| 1.33B | 802.70M | 942.80M | 2.35B | 2.00B | Net Income Common Stockholders |
| 294.30M | -310.50M | 170.30M | 1.69B | 1.23B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 290.50M | 449.40M | 395.60M | 142.30M | 1.38B | Total Assets |
| 21.85B | 23.66B | 24.96B | 28.20B | 23.57B | Total Debt |
| 6.23B | 7.30B | 7.46B | 6.60B | 4.25B | Net Debt |
| 5.94B | 6.86B | 7.06B | 6.45B | 2.87B | Total Liabilities |
| 13.13B | 14.61B | 15.25B | 16.61B | 12.50B | Stockholders Equity |
| 8.72B | 9.06B | 9.71B | 11.59B | 11.06B |
| Cash Flow | Free Cash Flow | |||
| 753.00M | 852.60M | -1.99B | 144.00M | 1.67B | Operating Cash Flow |
| 1.11B | 1.19B | -1.46B | 663.10M | 2.02B | Investing Cash Flow |
| 394.20M | -327.70M | 3.60B | -2.62B | -1.57B | Financing Cash Flow |
| -1.56B | -816.00M | -2.00B | 914.60M | 610.00M |
Stanley Black & Decker Technical Analysis
Negative
83.63
Price Trends
84.02
Negative
87.68
Negative
89.33
Negative
Market Momentum
-0.35
Positive
45.49
Neutral
8.00
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SWK, the sentiment is Negative. The current price of 83.63 is below the 20-day moving average (MA) of 85.58, below the 50-day MA of 84.02, and below the 200-day MA of 89.33, indicating a bearish trend. The MACD of -0.35 indicates Positive momentum. The RSI at 45.49 is Neutral, neither overbought nor oversold. The STOCH value of 8.00 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SWK.
Stanley Black & Decker Risk Analysis
Stanley Black & Decker disclosed 29 risk factors in its most recent earnings report. Stanley Black & Decker reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Stanley Black & Decker Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $80.47B | 25.85 | 24.08% | 1.04% | 0.41% | 19.76% | |
74 Outperform | $26.39B | 23.17 | 17.58% | 1.80% | 8.03% | 7.66% | |
65 Neutral | $147.17B | 38.93 | 7.57% | 0.52% | -13.50% | -17.25% | |
62 Neutral | $32.83B | 39.55 | 8.40% | 0.10% | 5.22% | 8.01% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% | |
60 Neutral | $1.16B | ― | -74.19% | 7.11% | -7.28% | -272.76% | |
48 Neutral | $12.58B | 43.04 | 3.38% | 4.00% | -2.63% | ― |
* Industrials Sector Average
Performance Comparison
SWK
Stanley Black & Decker
83.63
-2.46
-2.86%
DHR
Danaher
210.56
-41.25
-16.38%
LEG
Leggett & Platt
8.68
-11.29
-56.53%
PH
Parker Hannifin
640.05
114.33
21.75%
TTNDY
Techtronic Industries
70.41
11.34
19.20%
IR
Ingersoll Rand
84.43
-5.73
-6.36%
Stanley Black & Decker Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: -2.54% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Positive
The earnings call reflected a generally positive outlook with strong progress in gross margin expansion, stable revenues, significant debt reduction, and successful supply chain transformation. However, challenges such as automotive market softness, weak consumer environment, and potential tariff impacts were noted.Highlights
Gross Margin and Revenue Stability
Delivered full year revenues of $15.4 billion, flat on an organic basis, amidst a challenging market. Achieved adjusted gross margin greater than 31% in the fourth quarter and 30% for the full year, with a full year margin expansion of 400 basis points.
Organic Growth in Key Areas
DEWALT grew mid-single digits organically. Aerospace fastening achieved 22% organic growth.
Debt Reduction and Cash Flow
Generated $750 million in free cash flow, supporting $1.1 billion of debt reduction.
Supply Chain Transformation Success
Achieved approximately $500 million of pre-tax run rate cost savings in 2024, with a total of $1.5 billion since the program's inception.
Lowlights
Automotive Market Softness
The automotive business experienced a high single-digit organic decline due to OEMs reducing light vehicle production schedules.
Soft Consumer and DIY Environment
Faced a weak consumer and DIY backdrop which partially offset positive drivers.
Potential Tariff Impacts
Possible $90 to $100 million annualized unmitigated impact from tariffs, with $10 to $20 million net impact expected in 2025.
Company Guidance
During the fourth quarter and full year of 2024, Stanley Black & Decker, Inc. demonstrated significant progress in several key metrics despite a challenging macroeconomic environment. The company achieved full-year revenues of $15.4 billion, with a notable mid-single-digit organic growth in its DEWALT brand and a 22% increase in aerospace fastening. The adjusted gross margin expanded to over 31% in Q4 and 30% for the year, marking a 400 basis point improvement primarily due to supply chain enhancements. Stanley Black & Decker also reported an adjusted EBITDA of $1.6 billion, reflecting a margin of 10.1%, an increase of 290 basis points compared to 2023. The company generated approximately $750 million in free cash flow, which, along with proceeds from business divestitures, facilitated a $1.1 billion reduction in debt. Looking ahead to 2025, the company targets adjusted EPS of $5.25, plus or minus $0.50, and anticipates free cash flow between $650 to $850 million, focusing on strategic growth investments and supply chain optimizations while preparing to manage potential tariff impacts.Stanley Black & Decker Corporate Events
Business Operations and Strategy
Stanley Black & Decker Strategizes Against Tariff Impacts
Negative
Nov 12, 2024
Stanley Black & Decker is strategizing to mitigate potential financial impacts from anticipated tariff increases under the new administration, which could significantly affect its operating income by $200 million annually. By adjusting supply chains and negotiating price increases, the company aims to reduce these costs over the next 12 to 24 months. Despite these challenges, management remains committed to its long-term growth and profitability goals, leveraging its strong U.S. manufacturing base to offset potential setbacks.
Executive/Board Changes
Mojdeh Poul to Leave Stanley Black & Decker Board
Neutral
Nov 6, 2024
Mojdeh Poul will not seek re-election to Stanley Black & Decker’s board of directors at the 2025 annual meeting as she transitions to her new role as CEO of Integra LifeSciences Holdings. Her decision aligns with Integra’s policies on board service and is not due to any disagreements with Stanley Black & Decker.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.