Company Overview - Stanley Black & Decker, Inc. (SWK) is based in New Britain, Connecticut, and provides a range of products including hand tools, power tools, outdoor products, and engineered fastening systems, with a market cap of $11.6 billion and over 50,000 employees [1][2] Stock Performance - SWK stock has decreased by 32.3% from its three-year high of $110.88 on September 27, 2024, but has increased by 16.2% over the past three months, outperforming the S&P 500 Index's 12.2% gains during the same period [3] - Over the longer term, SWK has declined 6.6% in 2025 and 29.8% over the past 52 weeks, underperforming the S&P 500 Index's gains of 13.8% in 2025 and 17.4% over the past year [4] Financial Results - Following the release of mixed Q2 results on July 29, SWK's stock price fell by 7.2%. In Q2, the company's sales were $3.9 billion, down nearly 2% year-over-year and 1.1% below expectations. Operating cash flows decreased by 62.6% year-over-year to $214.3 million, while non-GAAP EPS dipped by 92 basis points to $1.08, exceeding consensus estimates of 38 cents [5] Competitive Position - Compared to peers, SWK has significantly underperformed Snap-on Incorporated (SNA), which saw a marginal 58 basis points dip in 2025 and a 19.2% surge over the past 52 weeks [6] - Among 16 analysts covering SWK, the consensus rating is a "Moderate Buy," with a mean price target of $84.25, indicating a 12.3% upside potential from current price levels [6]

Group 1: Zacks Premium Overview - Zacks Premium offers various tools for investors to enhance their stock market strategies, including daily updates on Zacks Rank and Industry Rank, Equity Research reports, and Premium stock screens [1] - The service aims to help investors become more confident and informed in their investment decisions [1] Group 2: Zacks Style Scores - Zacks Style Scores are indicators designed to assist investors in selecting stocks with the highest potential to outperform the market within a 30-day timeframe, rated from A to F based on value, growth, and momentum characteristics [2] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] Group 3: Value Score - The Value Score identifies attractive and discounted stocks using financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow, appealing to value investors [3] Group 4: Growth Score - The Growth Score evaluates stocks based on projected and historical earnings, sales, and cash flow, targeting companies with sustainable growth potential [4] Group 5: Momentum Score - The Momentum Score focuses on stocks experiencing upward or downward trends, utilizing factors like one-week price changes and monthly earnings estimate changes to identify favorable investment opportunities [5] Group 6: VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors who utilize multiple investment strategies, highlighting stocks with strong value, growth, and momentum [6] Group 7: Zacks Rank and Style Scores Integration - The Zacks Rank is a proprietary stock-rating model that leverages earnings estimate revisions to guide investors in building successful portfolios [7] - Stocks rated 1 (Strong Buy) have historically produced an average annual return of +23.75% since 1988, significantly outperforming the S&P 500 [8] Group 8: Stock Selection Strategy - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 that also possess Style Scores of A or B to maximize potential success [9] - The direction of earnings estimate revisions is crucial; stocks with lower ranks (4 or 5) may still have high Style Scores but are likely to decline in value [10] Group 9: Company Spotlight - Stanley Black & Decker - Stanley Black & Decker (SWK) is currently rated 3 (Hold) with a VGM Score of A, indicating potential for momentum investors [11] - The company has seen a 4.7% increase in shares over the past four weeks, with four analysts raising earnings estimates for fiscal 2025, leading to a Zacks Consensus Estimate increase of $0.20 to $4.59 per share [12] - SWK has an average earnings surprise of +57.3%, making it a noteworthy option for investors [12]

Industry Overview - The Zacks Manufacturing-Tools & Related Products industry includes companies that develop and distribute various tools and technology solutions, serving multiple sectors such as industrial, commercial, oil & gas, and automotive [3] - The industry is currently facing challenges due to a slowdown in the manufacturing sector, with the Manufacturing Purchasing Manager's Index at 49% in June, indicating contraction [4] - The New Orders Index has also been in contraction for five consecutive months, registering 46.4% in June [4] Current Challenges - The industry is experiencing input cost inflation and supply-chain issues, which are negatively impacting profitability and margins [5] - The Supplier Deliveries Index indicates slower deliveries for the seventh consecutive month, further complicating the operational landscape [5] - A shortage of skilled labor in the United States is also a significant challenge for the industry [1] Strategic Responses - Companies in the industry are focusing on cost-control measures and investments in product development to remain competitive [2] - Initiatives include streamlining operational structures, optimizing supply networks, and implementing effective pricing policies to manage costs [5] - Continuous innovation and product upgrades are seen as essential for long-term growth, although they may lead to highly leveraged balance sheets [6] Performance Metrics - The Zacks Manufacturing-Tools & Related Products industry currently holds a Zacks Industry Rank of 163, placing it in the bottom 34% of 246 Zacks industries, indicating weak prospects [7][8] - The industry's earnings estimates for 2025 have decreased by 7.3% over the past year, reflecting analysts' diminishing confidence in earnings growth potential [9] - Over the past year, the industry has underperformed compared to the sector and the S&P 500, growing only 7.7% versus 14.8% and 12.4% respectively [11] Valuation Insights - The industry is currently trading at a forward P/E ratio of 17.92X, which is below the S&P 500's 22.75X and the sector's 20.09X [14] - Historical trading ranges for the industry have been between 11.65X and 22.13X over the past five years, with a median of 18.55X [14] Notable Companies - **Stanley Black & Decker, Inc. (SWK)**: Focused on tools and engineered fastening systems, the company has shown solid momentum in its Tools & Outdoor segment, particularly in its DEWALT business. It has reported better-than-expected results in the last four quarters, with an average earnings surprise of 18.4% [19][20] - **Core & Main, Inc. (CNM)**: Provides water and fire protection products, benefiting from increased demand and recent acquisitions. Its fiscal 2026 earnings estimates have been revised upward by 1.2% in the past 60 days [23][24] - **Kennametal Inc. (KMT)**: Specializes in high-speed metal cutting tools and has seen improved supply chain conditions and increased OEM build rates in aerospace markets. The company has consistently surpassed earnings estimates, with an average surprise of 27% [26][27]