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Stanley Black & Decker’s Exclusive Partnership with Home Depot

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Oct. 29 2018, Updated 1:09 p.m. ET

Stanley Black & Decker and Home Depot

On October 25, Stanley Black & Decker (SWK) announced that Home Depot (HD) will be the exclusive retailer for its Stanley hand tools and storage product portfolio. The STANLEY FATMAX product line will also be offered exclusively at Home Depot—in the store and online. The contract will be effective at the beginning of 2019.

Jeff Ansell, Stanley Black & Decker’s executive vice president and president of the global tools and storage business, said, “This partnership with The Home Depot represents an exciting alignment that provides both pro and DIY consumers with unparalleled access to the world-class STANLEY and STANLEY FATMAX portfolios. Joining the existing exclusivities of DEWALT FLEXVOLT cordless tools and DEWALT hand tools, the addition of STANLEY and STANLEY FATMAX enhances the robust offering of our brands to the loyal Home Depot customer.”

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Stock price update

Stanley Black & Decker stock declined ~6.7% and closed at $110.21 for the week ending October 26. The decline was triggered by the disappointing downward revision of the company’s adjusted EPS. The downward revision was announced during the third-quarter earnings. The new range is expected to be $8.10–$8.20—compared to the previous guidance of $8.30–$8.50.

The steep decline in the stock price caused the stock to trade 20.8% below the 100-day moving average price of $139.12, which indicates a bearish trend in the stock. However, investors need to be careful. Stanley Black & Decker’s 14-day relative strength index has fallen to 16, which suggests that the stock has temporarily moved into “oversold” territory and could bounce back from these levels.

On a year-to-date basis, Stanley Black & Decker has fallen 35.0%. Deere (DE) and Caterpillar (CAT) have declined 15% and 27.0%, respectively.

Investors could hold Stanley Black & Decker indirectly by investing in the Invesco S&P 500 Equal Weight Industrials ETF (RGI), which has invested 1.2% of its portfoli0 in Stanley Black & Decker.

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