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On Wednesday, Stanley Black & Decker (NYSE:SWK) received a favorable outlook from Jefferies, as the firm initiated coverage with a Buy rating and set a price target of $103.00. The new assessment anticipates approximately 20% growth potential for the company’s shares, driven by positive developments across its brand portfolio and operational efficiencies.
Jefferies cited several factors contributing to the optimistic view, including momentum for the DEWALT brand, stabilization of the CRAFTSMAN brand, and expected gross margin improvements in 2025. The analysts believe that as Stanley Black & Decker transitions its narrative from transformation to organic growth, the market will likely reward the stock with a higher multiple in the second half of the year.
The firm also forecasts that upward revisions to the 2026 Street EPS may occur as investors gain confidence in management’s strategy for margin expansion. This confidence is rooted in the profit improvements anticipated to follow the company’s intensive restructuring efforts initiated in 2022. For deeper insights into Stanley Black & Decker’s financial health and growth prospects, InvestingPro subscribers can access comprehensive analysis and 10 additional exclusive ProTips.
The Jefferies team expects this strategic shift to enhance profitability and contribute to the stock’s performance, as Stanley Black & Decker continues to execute its plan. The analysts’ statement emphasizes the potential for the company’s management playbook to add to the profit improvement that has been underway since last year.
Stanley Black & Decker’s stock is set to benefit from these strategic initiatives, with Jefferies projecting a positive trajectory for the company as it moves towards realizing its operational goals and financial targets in the coming years.
In other recent news, Stanley Black & Decker reported a decrease in Q3 2024 revenue by 5% to $3.8 billion, despite this, the company highlighted improvements in margins and cash flow. The company used its free cash flow to reduce debt, and adjusted gross margin and EBITDA margin saw significant increases. The full-year earnings per share guidance was also narrowed. Recent developments also include an upgrade in Stanley Black & Decker’s stock rating by Mizuho (NYSE:MFG), moving from Neutral to Outperform. Mizuho’s confidence in Stanley Black & Decker was based on a blend of price-to-earnings and EBITDA valuations, with the firm also noting the added benefit of a 4% dividend yield for the company’s investors. According to Mizuho, Stanley Black & Decker’s shares are trading at a significant discount compared to its peers, making it an attractive pick in its sector. These developments reflect Stanley Black & Decker’s ongoing efforts to improve financial performance amidst market challenges.
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