Stanley Black & Decker (SWK): Valuation in Focus After Margins Boost, Guidance Miss, and Sector Comparison

Stanley Black & Decker (SWK) just posted its third quarter results, reporting improved gross margins and healthy free cash flow. However, a slight miss in full-year earnings guidance compared to peers has drawn fresh investor attention.

See our latest analysis for Stanley Black & Decker.

Stanley Black & Decker’s share price jumped 5.9% in the last day following its upbeat margin and cash flow numbers, but this pop only partially offsets a tough year. Total shareholder return is still down 22.6% over the past twelve months, reflecting caution among investors even as operational turnaround efforts continue.

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This leaves investors weighing their options, asking whether current market weakness means Stanley Black & Decker is trading at a discount or if Wall Street is fairly factoring in slower growth ahead.

Most Popular Narrative: 22.4% Undervalued

Stanley Black & Decker’s fair value estimate, according to the most widely followed narrative, stands at $85.30 per share, which is well above the last closing price of $66.15. This gap suggests some believe the market is overlooking potential upside from the company's transformation and cash flow improvements.

“The multi-year supply chain transformation nearing its final phase is delivering substantial recurring cost reductions, improved operational flexibility, and resilience to trade/tariff shocks; management expects these initiatives to drive gross margin back to 35%+ by late 2026, supporting sustained improvements in net margins and earnings.”

Read the complete narrative.

Want to see what future margins are baked into this bold price target? The most popular narrative hints at margin expansion and a big leap in profits, along with a key assumption about efficiency gains you might not expect. Curious about the core numbers driving this fair value? Unlock the full narrative for the details fueling the upside case.

Result: Fair Value of $85.30 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistently soft DIY demand and ongoing cost pressures could undermine revenue growth and slow margin expansion in the coming quarters.

Find out about the key risks to this Stanley Black & Decker narrative.

Build Your Own Stanley Black & Decker Narrative

If you see things differently, or want to dive into the numbers your own way, you can craft your own fair value story in a few minutes. Do it your way

A great starting point for your Stanley Black & Decker research is our analysis highlighting 4 key rewards and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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