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Bear Of the Day: Stanley Black Decker (SWK)

Brian Bolan
·2 min read

Stanley Black Decker (SWK) is a Zacks Rank #5 (Strong Sell) and it is the Bear of the Day today. The stock recently beat the Zacks Consensus Estimate but estimates are moving lower and that is the main reason the stock fell to the lowest Zacks Rank.

Description

Headquartered in New Britain, CT, Stanley Black & Decker, Inc. manufactures and provides tools (power and hand tools) and related accessories, healthcare solutions, electronic security solutions, engineered fastening systems, and many more items and services.

Earnings History

SWK has a really good earnings history.  I see four straight beat of the Zacks Consensus Estimate, which makes you wonder why this is a Zacks Rank #5 (Strong Sell). 

The Zacks Rank does take into consideration earnings history, but earnings estimates carry a much bigger weight.

Estimate Revisions

Earnings estimates for SWK have fallen drastically. The current quarter was at $2.44  60 days ago and fell to $2.03 30 days ago. Now the estimate stands at $0.11.  That is a big move lower.

Next quarter also fell, but not as much moving from $2.37 down to $1.44.

Full year estimates have also dropped in a big way.  This year fell from $8.87 60 days ago to $5.19. Next year is also looking at a big move lower.

Valuation

I see a forward PE of 21x and that is a lot for a stock that is seeing topline contraction. The price to book is more reasonable at 2.2x and the price to sales multiple of 1.2x is also respectable.   

Chart

Stanley Black Decker Inc Price, Consensus and EPS Surprise

Stanley Black  Decker Inc Price, Consensus and EPS Surprise
Stanley Black Decker Inc Price, Consensus and EPS Surprise

Stanley Black Decker Inc price-consensus-eps-surprise-chart | Stanley Black Decker Inc Quote

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