Stanley Black & Decker, Inc. SWK is witnessing persistent strength in the Tools & Outdoor segment, driven by strong momentum in its DEWALT business and a solid holiday season. Growing popularity for the company’s several brands like powershift, Construction Jack and toughsystem, along with new product launches, is driving its DEWALT business. However, softness in the DIY market and depressing demand for power tools remain concerning. The segment’s organic revenues in the fourth quarter of 2024 increased 3% to $3.2 billion

The company’s multi-year global cost-reduction program comprises a series of initiatives to resize the organization, reduce inventory and optimize the supply chain with the goal of improving its profitability and repositioning it to pursue sustainable long-term growth. 

Stanley Black expects to generate pre-tax run-rate cost savings of $2 billion by the end of 2025, with an adjusted gross margin of more than 35% in the long term. Of the $2 billion savings, $1.5 billion is expected to be achieved from SWK’s four core supply-chain transformation initiatives of operations excellence, material productivity, footprint actions and complexity reduction.

Regarding rewards to shareholders, the company used $491.2 million for paying out dividends in 2024, reflecting an increase of 1.8% year over year. It repurchased shares worth $17.7 million in the same year. Also, in July 2024, it hiked its quarterly dividend by a penny to 82 cents per share.

SWK Stock’s Price Performance

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In the past week, this Zacks Rank #3 (Hold) company's shares have gained 1.4% compared with the industry’s 4.6% growth.

However, persistent softness in the automotive end market, owing to headwinds in the global automotive OEM light vehicle production and constrained capex spending, has been affecting its Industrial segment’s performance. In the fourth quarter, revenues from the segment declined 15.4% year over year to $492.9 million.

The company’s highly leveraged balance sheet remains another concern. Exiting 2024, SWK’s long-term debt remained high at $5.6 billion. Its current maturities of long-term debt totaled $500.4 million. Also, considering its high debt level, its cash and cash equivalents of $290.5 million do not look impressive.

Key Picks

Some better-ranked companies from the same space are discussed below.

AZZ Inc. AZZ currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AZZ delivered a trailing four-quarter average earnings surprise of 15.2%. In the past 60 days, the Zacks Consensus Estimate for AZZ’s 2025 earnings has decreased 1.9%.

Allegion plc ALLE presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 9.9%.

In the past 60 days, the consensus estimate for ALLE’s 2025 earnings has increased 1.4%.

Applied Industrial Technologies, Inc. AIT presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 5.3%.

The Zacks Consensus Estimate for AIT’s fiscal 2025 (ending June 2025) earnings has improved 0.3% in the past 60 days.

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Stanley Black & Decker, Inc. (SWK) : Free Stock Analysis Report

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