Yahoo Finance Bear of the Day: Stanley Black & Decker (SWK)
Stanley Black & Decker (SWK) is the company behind iconic power tool brands and more. Stanley Black & Decker is coming off two years of impressive top-line growth. But its earnings already came under huge pressure in 2022 as it struggles with rather large inventory issues and other setbacks. And SWK’s earnings outlook for 2023 and 2024 has tumbled.
Tools Galore
Stanley Black & Decker’s offerings include power tools, hand tools, storage, digital tool solutions, outdoor products, engineered fasteners, various other industrial equipment, and beyond. Some of SWK’s brands include Dewalt, Black+Decker, Cub Cadet, Craftsman, and Stanley.
Stanley Black & Decker’s revenue climbed 11% in 2022 after it posted roughly 20% sales growth in 2021. Yet, its adjusted earnings plummeted last year.
Zacks estimates call for its adjusted earnings to fall another 83% in 2023 from $4.62 per share all the way to $0.77 a share on 4% lower sales. Plus, the nearby chart shows that its adjusted earnings outlook has fallen off a cliff over the last year for FY23 and FY24 to help it land a Zacks Rank #5 (Strong Sell).
Image Source: Zacks Investment Research
Stanley Black & Decker’s adjusted earnings are projected to start to bounce back in a rather big way in 2024 on slightly higher sales. And the company is aiming to return its gross margins to “historical 35%+ levels by accelerating the operations and supply chain transformation to improve fill rates and better match inventory with customer demand.”
Bottom Line
Stanley Black & Decker remains a strong company overall and its brands should continue to be staples in the power tool and outdoor equipment space. SWK’s dividend also yields around 4% at the moment. That said, its dividend payout ratio sits at a somewhat large 71%.
SWK shares have fallen around 45% in the past 12 months and over 60% in the trailing 24 months. The selloff has Stanley Black & Decker up just around 4% in the past decade.
Some might think now is a good time to try to buy SWK at its potential lows. Yet it failed to breakout above some key moving averages recently and it might be wise to wait and see the turnaround truly form before considering Stanley Black & Decker stock again.
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Stanley Black & Decker, Inc. (SWK) : Free Stock Analysis Report
