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On Tuesday, Barclays (LON:BARC) analyst Julian Mitchell upgraded Stanley Black & Decker (NYSE:SWK) stock from Equal Weight to Overweight and increased the price target to $90 from $69. The upgrade comes with a revised earnings per share (EPS) estimate, reflecting a more optimistic outlook for the company’s financial performance.
Mitchell cited the recent developments in the U.S.-China trade relations as a significant factor for the upgrade. The expected tariffs are now substantially lower than previously anticipated. This change led Barclays to adjust its EPS estimates for Stanley Black & Decker closer to the levels before April 2, approximately $5 for 2025, up from the post-April 2 scenario of around $4.50. The initial EPS guidance was roughly $5.25.
For 2026, Barclays estimates an EPS of $5.76 for Stanley Black & Decker, which is higher than the consensus estimate of $5.64 from other analysts. This forecast is based on an anticipated organic sales growth of 4% and an adjusted operating margin expansion of 100 basis points.
The analyst’s report also noted that Stanley Black & Decker had previously been identified as one of the companies most vulnerable to the impact of U.S.-China tariffs within the machinery industry. The revised estimates now take into account tariffs of 30% for U.S. tariffs on Chinese goods and 10% for Chinese tariffs on U.S. products, a significant decrease from the earlier figures of 145% and 125%, respectively.
This upgrade by Barclays signals a more favorable outlook for Stanley Black & Decker, as trade tensions ease and the company’s financial projections improve. The new price target of $90 reflects the analyst’s increased confidence in the company’s ability to navigate through the changing tariff landscape and deliver growth.
In other recent news, Stanley Black & Decker reported its Q1 2025 earnings, achieving an earnings per share (EPS) of $0.75, which exceeded analysts’ expectations of $0.66. The company, however, reported revenue of $3.7 billion, slightly below the anticipated $3.71 billion. Despite the earnings beat, the company experienced a free cash outflow of $485 million. The DEWALT brand continues to be a significant driver of revenue growth for the company. Analysts from various firms have noted the company’s strategic efforts to enhance operational efficiency through cost-saving measures. Stanley Black & Decker is actively working on mitigating tariff impacts by adjusting its supply chain and implementing price increases. The company maintains its 2025 EPS guidance, anticipating low single-digit total sales increases. Despite ongoing challenges, the company is focused on strategic adjustments to navigate the current market conditions.
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