Opinions
Stockchase Insights
Stanley Black and Decker
SWK-N
HOLD
May 24, 2023
$79.290
Stock price when the opinion was issued
0
It's the ideal tool to help you make quicker, more informed decisions for
managing and tracking your investments.
You might be interested:
BUY
Something's wrong with the market this earnings season--a company reports great numbers, but the market shrugs because she stock has already roared. This happened to SWK which posted a monster earnings beat including 31% organic growth and raised their full-year earnings broadcast. Shares initially fell till it fell to 19x the midpoint of its new earnings. This is a steal.
misc industrial products
BUY ON WEAKNESS
Advertising
SWK pays a yield of 4.0% but is not expected to grow its sales this year and profitability is anticipated to resume next year. Its debt levels are somewhat elevated but have been declining over the past few years. Its balance sheet has dropped significantly from 2021, where it had an equity position of $11.6B, to an equity position today of $9.5B. The company's earnings fell in 2022, leading to large negative free cash flows for the year. It trades at a high valuation of 34.8X forward P/E, but its share price has been consolidating around the ~$80 range. We feel that it may not do much for the next few quarters, but it does have a long history of profitability and returning value to shareholders, and we would be comfortable with the name while being mindful of its current risks.
Unlock Premium - Try 5i Free