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SWK – Market expectations are for Uniform ROA to remain stable, but management may be concerned about margins, products, and acquisitions

September 25, 2020

  • Stanley Black & Decker, Inc. (SWK:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) earnings, with a 20.6x Uniform P/E. At these levels, the market has expectations for profitability to remain stable, but management may be concerned about margins, products, and the MTD Holdings acquisition

  • Specifically, management may lack confidence in their ability to maintain margins and pivot their business rapidly. Furthermore, they may be concerned about the declining light vehicle production of Engineered Fastening, the potential of the new cordless tools in their FLEXVOLT product line, and their growth and business position. In addition, management may have concerns about the acquisition of MTD Holdings