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Stanley Black (SWK) to Report Q1 Results: Is a Beat in Store?

Stanley Black & Decker, Inc. SWK is slated to report first-quarter 2021 results on Apr 28, before market open.

The industrial tool maker delivered impressive results in the last four quarters, with an earnings surprise of 12.7%, on average. Notably, its fourth-quarter 2020 earnings of $3.29 per share surpassed the Zacks Consensus Estimate of $2.98.

In the past three months, shares of the company have gained 20.6% compared with the industry’s growth of 7.7%.




 

Let us delve deeper.

Key Factors & Estimates for Q1

Stanley Black’s Tools & Storage business in Europe is likely to have gained from strengthening e-commerce and retail businesses in the first quarter. Also, improvements in the Asia business are expected to have aided the segment’s performance from emerging markets. In North America, strengthening retail POS in the United States, improvement in commercial and industrial businesses, and channel inventory rebuild are likely to have been tailwinds.

For the Industrial segment, improvements in industrial fasteners, attachment tools and automotive businesses are believed to have been tailwinds. However, weakness in oil & gas and aerospace markets are expected to have been spoilsports. Then again, the impacts of growth actions taken by the company as well as improvements in markets are likely to get reflected on Security’s results.

In addition to the aforementioned factors, synergistic benefits from acquired assets, innovation of products and general improvement in manufacturing markets are expected to have aided the top-line performance in the quarter under review. On the flip side, headwinds associated with inflation, mergers and acquisition-related charges, and high debts are anticipated to have had adverse impacts on the company’s performance.

The toolmaker’s scenario planning calls for a 21-26% increase in organic growth in the first quarter of 2021. The Tools & Storage segment’s organic sales are expected to increase 30-40% year over year, while that of Industrial segment is anticipated to be down 5% to remain flat. Security’s organic sales are expected to be flat to up 3%.

The Zacks Consensus Estimate for revenues is pegged at $3,996 million for the first quarter of 2021, suggesting a 27.7% increase from the year-ago quarter’s reported number and a 9.3% decline from the previous quarter’s reported figure.

For the Security segment, the Zack Consensus Estimate for first-quarter sales is pegged at $474 million, indicating a 1.3% increase from the year-ago reported figure and a 3.7% fall sequentially. Further, sales estimates for the Industrial segment are pegged at $622 million. This suggests growth of 5.2% from the year-ago reported number and a 5.5% decrease from the previous quarter’s reported figure. Likewise, the estimate for the Tools & Storage segment’s revenues is pegged at $2,874 million, indicating a 38.7% increase from the year-ago reported figure and an 11.8% decline sequentially.

The Zack Consensus Estimate for the company’s first-quarter earnings is pegged at $2.56, indicating an increase of 113.3% from the year-ago reported figure and a 22.2% decline from the previous quarter.

Earnings Whispers

Our proven model suggests an earnings beat for Stanley Black this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. The case with Stanley Black & Decker is shown below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Stanley Black has an Earnings ESP of +3.39%, with the Most Accurate Estimate of $2.65 above the Zacks Consensus Estimate of $2.56.

Stanley Black & Decker, Inc. Price, Consensus and EPS Surprise

 

Stanley Black & Decker, Inc. price-consensus-eps-surprise-chart | Stanley Black & Decker, Inc. Quote

Zacks Rank: The company currently has a Zacks Rank #3.

Other Stocks to Consider

Here are some other companies in the Zacks Industrial Products sector that you may want to consider as according to our model these too have the right combination of elements to post an earnings beat this quarter.

The Middleby Corporation MIDD has an Earnings ESP of +0.21% and it currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Caterpillar Inc. CAT presently has an Earnings ESP of +3.15% and a Zacks Rank of 2.

AGCO Corporation AGCO currently has an Earnings ESP of +2.94% and is a Zacks #3 Ranked player.

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AGCO Corporation (AGCO): Free Stock Analysis Report
 
Caterpillar Inc. (CAT): Free Stock Analysis Report
 
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The Middleby Corporation (MIDD): Free Stock Analysis Report
 
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