SWK – Market expectations are for Uniform ROA to improve, but management may be concerned about their growth, EPS, and market share

• Stanley Black & Decker, Inc. (SWK:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) Earnings, with a 21.3x Uniform P/E. At these levels, the market is expecting profitability to improve, but management may be concerned about their growth, EPS, and market share
• Specifically, management may lack confidence in their ability to sustain double-digit growth in the Craftsman brand and in their ability to realize $200mn in savings from their cost reduction measures. Furthermore, they may be concerned about the sustainability of recent volume growth within health care, automatic doors, and electronic security, and they appear concerned about ongoing margin headwinds through the remainder of 2019. Finally, they may lack confidence in their ability to sustain market share growth in South America and Southeast Asia and in their ability to improve their EPS.