Stanley Black & Decker Upgraded - Analyst Blog
21 Março 2013 - 11:20AM
Zacks
We recently upgraded our
recommendation on industrial tool maker, Stanley Black
& Decker Inc. (SWK) to Neutral. The stock was
previously rated Underperform by us.
Why Upgrade to Neutral?
Stanley Black & Decker is a major player in the machine tools
and accessories industry, currently having a $13.1 billion market
capitalization. We believe future growth prospects of industrial
tool makers are very bright as demand for tools is expected to
surge as the global economy revives slowly. Emerging markets are
likely to be a favourite destination for these companies.
Talking about Stanley Black & Decker alone, we see the
company’s strategic initiatives position it well for growth.
Acquisitions carried out in the past have proved to be very
advantageous for the company. Mention may be made of Black &
Decker and Niscayah, both acquired in 2011 and Infastech, Hong Kong
based leading manufacturer and supplier of specialty engineered
fastening technologies, purchased in February 2013.
Besides acquisitions, divestment of non-core assets has helped the
company utilize the free resources in a meaningful way. Divestment
of Hardware & Home Improvement Group (HHI) in Dec 2012 fetched
Stanley Black & Decker after-tax proceeds of roughly $1.3
billion, which the company intends to utilize for share buybacks,
dividend payments or acquisitions.
These positives notwithstanding, it’s the near-term concern that
has restricted our recommendation change on Stanley Black &
Decker to Neutral. Management’s guidance for 2013 points towards a
weak security and industrial markets in the United States in 2013,
offsetting slight gains expected from the housing market related
recovery. It is anticipated that European markets would witness a
decline in the industrial and security markets and flat
construction market. Headwinds are also expected from a higher tax
rate and escalating interest expense.
Others Stocks to Consider
Other stocks to watch out for in the industry are Proto
Labs, Inc. (PRLB), Kaydon Corporation
(KDN) and Actuant Corporation (ATU), each holding
a Zacks Rank #2 (Buy).
ACTUANT CORP (ATU): Free Stock Analysis Report
KAYDON CORP (KDN): Free Stock Analysis Report
PROTO LABS INC (PRLB): Free Stock Analysis Report
STANLEY B&D INC (SWK): Free Stock Analysis Report
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