Stanley Black & Decker: Strong Q2 Beats Estimates, FY2024 Guidance Upgrade - Turnaround Is Just Getting Started

Jeffrey Adams
500 Followers
(13min)

Summary

  • SWK just reported strong Q2 earnings, beating revenue and earnings expectations.
  • With rate cuts on the horizon, SWK is poised to capitalize upon increased commercial and residential construction activity.
  • Global cost savings plan remains on track to deliver $2 billion by FY2025.
  • Adjusted gross margins continue to expand and are beginning to approach the long-term goal of +35% by FY2025.
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Introduction

I last covered Stanley Black & Decker (NYSE:SWK) on April 8th of this year, when shares traded at $95.25, and I assigned a "Buy" rating. Shares have since rebounded by 10.73%, surpassing the S&P 500's increase of 4.55% by a wide margin. I have significantly increased

This article was written by

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I'm an individual value investor currently working towards my bachelor's degree in Finance at Florida State University, with the goal of earning my CFA. My passion lies in equity research and fundamental analysis, and I credit Tom Hayes, Founder and Chairman of Great Hill Capital, LLC, for greatly influencing my investment strategy. I've also drawn inspiration from legendary investors like Ben Graham, Warren Buffett, Charlie Munger, Peter Lynch, Seth Klarman, and Michael Burry. My investment strategy is pretty straightforward: I look for high-quality companies that are selling below their intrinsic value. I favor sustainable, wide-moat businesses with strong cash flow, shareholder-friendly management, and near-term catalysts to unlock value. A lot of my investments are in turnaround situations - whether it's an entire sector that's been left for dead or a unique company-specific situation, I try to find companies that are temporarily impaired yet priced as if in permanent decline. I like to hold a pretty concentrated portfolio of around 8 to 12 stocks, with my top 5 positions usually making up more than 60% of the total. My investment horizon is typically 3 to 5 years, a key advantage when it comes to dealing with Mr. Market's short-term impatience. "Many shall be restored that now are fallen, and many shall fall that now are in honor." - Horace

Analyst’s Disclosure:I/we have a beneficial long position in the shares of SWK either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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