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One of the most trusted brands of Stanley Black & Decker, Inc. SWK, CRAFTSMAN, yesterday announced the adoption of a brand identity and launch of an array of products, tools and accessories.
It’s worth noting here that CRAFTSMAN became part of Stanley Black in March 2017, when the Stanley Black acquired it from Sears Holdings Corporation SHLD. CRAFTSMAN strongly complements the company’s existing tools and storage brands. It has also created business opportunities, mainly in the lawn and garden market. On the other hand, Stanley Black’s initiatives to enhance the availability of CRAFTSMAN products through non-Sears channels — preferably retail, industrial, mobile and online — add to the brand’s popularity.
By 2019, CRAFTSMAN plans to add in excess of 1,200 fresh items to its existing tools and products portfolio. The new offerings can be categorized under Hand Tools; Power Tools, Equipment & Accessories; Mechanic & Automotive Tools; Lawn & Garden Power Equipment; and Storage & Organization Solutions.
To begin with, Stanley Black intends on manufacturing 30% of planned products, domestically, while might opt for increasing this share to 50% in the years ahead. Interested customers can find the new CRAFTSMAN offerings on e-retailer site — Amazon, Lowe's Home Improvement and ACE Hardware stores, starting from this month.
Further, the company believes that a new logo and the happening color scheme will add more vigor to the CRAFTSMAN brand.
Snapshot of CRAFTSMAN Acquisition
Stanley Black paid $525 million in cash for CRAFTSMAN products at the time of deal closing and also agreed to pay $250 million at the end of three years of deal completion. Further, the company accepted to make annual payment equivalent to 2.5% of new Stanley Black & Decker CRAFTSMAN sales through 2020, 3% through January 2023 and 3.5% thereafter. An approximate net present value of these cash flows is roughly $900 million.
The company now anticipates generating $1 billion in sales from CRAFTSMAN products earlier than the initial forecast of 10 years of acquisition.
Zacks Rank & Key Picks
With a market capitalization of nearly $23.2 billion, Stanley Black currently carries a Zacks Rank #3 (Hold). The company stands to gain from solid product portfolio and favorable e-commerce trends as well as business expansion in emerging markets. However, forex tailwinds and increase in commodity inflation are predicted to adversely impact earnings by 40 cents and 30 cents per share, respectively.
In the past three months, Stanley Black’s share price has increased 13.7%, outperforming 12.5% growth recorded by the industry.
In the past 60 days, the Zacks Consensus Estimate for earnings per share on Stanley Black has remained stable at $8.39 for 2018 while increased by two cents to $9.41 for 2019.
Stanley Black & Decker, Inc. Price and Consensus
Stanley Black & Decker, Inc. Price and Consensus | Stanley Black & Decker, Inc. Quote
Two better-ranked stocks worth considering in the Zacks Industrial Products sector are Colfax Corporation CFX and Chart Industries, Inc. GTLS. While Colfax sports a Zacks Rank #1 (Strong Buy), Chart Industries carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, earnings estimates for both the stocks have improved for the current year and the next year. The average positive earnings surprise for the last four quarters was 7.91% for Colfax and 29.36% for Chart Industries.
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