The consensus rating among the 18 analysts covering Stanley Black & Decker (SWK) hasn’t changed since the beginning of the year. Seven analysts have a “buy” rating on the stock, and the remaining analysts have a “hold” rating. As we discussed in the previous part of this series, SWK’s 4Q15 sales were hampered by forex translations and soft industrial (XLI) demand in key product lines. Additionally, the company’s guidance for 2016 earnings in January came in 20–40 cents short of expectations, prompting several analysts to revise their ratings downwards. Since this guidance reversed after the 1Q16 results, analysts from key banking companies (VFH) raised the target price.
Notable target revisions
The average 12-month target price for SWK stock increased from $115.70 in the beginning of January to $120.25 by July 12. At a price of $116.84 on July 12, this constituted a return potential of 2.9%. JPMorgan Chase (JPM), which has a neutral rating for the stock, initially revised its target from $115 in the beginning of January to $103 after the 4Q15 results. JPM had a target of $120 by July 12. Among other revisions, Morgan Stanley (MS) increased its target from $112 to $127, and UBS (UBS), which has a buy rating on the stock, increased its target from $120 to $125.