SNA – Market expectations are for Uniform ROA to fade, and management may have concerns about margins, sales growth, and the OEM project business

• Snap-on Incorporated (SNA:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 15.1x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm, and management may have concerns about operating margins, organic sales growth, and the OEM project business.
  
• Specifically, management may lack confidence in their ability to improve their operating margin, sustain organic sales growth, and manage operating expenses. Moreover, they may have concerns about their OEM project business and the Asia Pacific macroeconomic environment. Furthermore, management may be exaggerating the impact of ZEUS on their diagnostics information systems and they may have concerns about the health of the auto repair market. Finally, they may lack confidence in their ability to sustain solid financial performance and maintain a favorable debt-toequity ratio.