Market Overview

Longbow Goes Neutral On Stanley Black & Decker As Shares Close To Nailing The Target Price


Longbow Research downgraded Stanley Black & Decker, Inc. (NYSE: SWK) to Neutral as shares near its earlier $125 price target and have gained 35 percent since mid-first quarter.

"We continue to view SWK as one of the better managed companies on our coverage list, with a strong portfolio of businesses and a solid FCF outlook. However, the recent price appreciation has in our view brought the shares closer to fair value and a more neutral risk/reward," analyst David Macgregor wrote in a note.

Following an 8-quarter stretch with Tools segment average growth of 8-10 percent, the analyst expects a more moderate mid-single digit pace from here.

Also, the analyst sees growth challenges in both Security and Industrial to continue into the second half. Against that backdrop of slowing growth, he said EV/EBITDA share price valuation multiples are at 10 year highs.

However, Macgregor reaffirmed his EPS forecasts of $6.50 for 2016 (guidance $6.30 - $6.50) and $7.10 for 2017, reflecting expected 2017 EPS growth of 9 percent. The Street consensus calls for EPS of $6.47 and $7.08 for 2016 and 2017, respectively.

At time of writing, shares were down 0.61 percent to $121.37.

Latest Ratings for SWK

Jan 2021Morgan StanleyMaintainsOverweight
Jan 2021B of A SecuritiesDowngradesNeutralUnderperform
Dec 2020Morgan StanleyMaintainsOverweight

View More Analyst Ratings for SWK
View the Latest Analyst Ratings


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Posted-In: David MacGregor LongbowAnalyst Color Downgrades Price Target Analyst Ratings

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