Can 1Q18 Earnings Help SWK’s Stock Price Bounce Back?



SWK to report 1Q18 earnings

Stanley Black & Decker (SWK) is set to announce its 1Q18 earnings on April 20, 2018, before the market opens. It plans to hold a conference call that day at 8:00 AM EST. In this series, we’ll look at SWK’s stock performance since its 4Q17 earnings and analysts’ revenue and EPS (earnings per share) estimates and recommendations.

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SWK’s stock performance since 4Q17

SWK announced its 4Q17 results on January 24, 2018. It reported revenue growth of 17% for the quarter, and adjusted EPS growth of 27%. However, since 4Q17 earnings, SWK has fallen 10.2%. The decline was primarily due to market volatility resulting from speculation that we’ll see more interest rate hikes than expected in fiscal 2018 and a possible US-China trade war.

After going through a correction, the stock could be poised to bounce back. SWK is expected to deliver yet another solid earnings performance in 1Q18, and positive business developments like the acquisition of Nelson Fastener Systems from Doncasters Group will likely support the company’s performance. Peers Dover (DOV), Illinois Tool Works (ITW), and 3M (MMM) have seen a similar downtrend and have fallen 10.0%, 10.0%, and 12.1%, respectively.

Moving averages and relative strength index

SWK stock, after a significant decline, is now trading 5.8% below its 100-day moving average of $162.61, indicating a downward trend in the stock. SWK’s 14-day RSI (relative strength index) score of 48 indicates that it’s neither overbought nor oversold. An RSI score below 30 indicates that a stock may be oversold, while an RSI score above 70 indicates that a stock may be overbought. Investors can indirectly hold SWK through the Industrial Select Sector SPDR ETF (XLI), which had 1.1% of its portfolio invested in Stanley Black & Decker as of April 16, 2018.


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