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Q3 Rundown: Stanley Black & Decker (NYSE:SWK) Vs Other Professional Tools and Equipment Stocks

By: StockStory

December 27, 2024 at 04:03 AM EST

SWK Cover Image

The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how professional tools and equipment stocks fared in Q3, starting with Stanley Black & Decker (NYSE: SWK).

Automation that increases efficiency and connected equipment that collects analyzable data have been trending, creating new demand. Some professional tools and equipment companies also provide software to accompany measurement or automated machinery, adding a stream of recurring revenues to their businesses. On the other hand, professional tools and equipment companies are at the whim of economic cycles. Consumer spending and interest rates, for example, can greatly impact the industrial production that drives demand for these companies’ offerings.

The 10 professional tools and equipment stocks we track reported a slower Q3. As a group, revenues beat analysts’ consensus estimates by 0.6% while next quarter’s revenue guidance was 3% below.

While some professional tools and equipment stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.5% since the latest earnings results.

Stanley Black & Decker (NYSE: SWK)

With an iconic “STANLEY” logo which has remained virtually unchanged for over a century, Stanley Black & Decker (NYSE: SWK) is a manufacturer primarily catering to the tool and outdoor equipment industry.

Stanley Black & Decker reported revenues of $3.75 billion, down 5.1% year on year. This print fell short of analysts’ expectations by 1.4%. Overall, it was a slower quarter for the company with full-year EPS guidance missing analysts’ expectations and a slight miss of analysts’ organic revenue estimates.

Donald Allan, Jr., Stanley Black & Decker's President & CEO, commented, "In the third quarter we continued to deliver gross margin improvements as well as robust cash generation, all as a result of solid execution against our operational priorities. While a weak consumer and automotive production backdrop impacted organic revenue, we capitalized on relative bright spots and delivered our sixth consecutive quarter of DEWALT growth as well as higher sales in aerospace fasteners.

Stanley Black & Decker delivered the slowest revenue growth of the whole group. Unsurprisingly, the stock is down 21.6% since reporting and currently trades at $80.70.

Read our full report on Stanley Black & Decker here, it’s free.

Best Q3: ESAB (NYSE: ESAB)

Having played a significant role in the construction of the iconic Sydney Opera House, ESAB (NYSE: ESAB) manufactures and sells welding and cutting equipment for numerous industries.

ESAB reported revenues of $673.3 million, down 1.1% year on year, outperforming analysts’ expectations by 8.9%. The business had an exceptional quarter with a solid beat of analysts’ EBITDA estimates.

ESAB achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 10.2% since reporting. It currently trades at $122.74.

Is now the time to buy ESAB? Access our full analysis of the earnings results here, it’s free.

Weakest Q3: Hyster-Yale Materials Handling (NYSE: HY)

Playing a significant role in the development of the hydraulic lift truck, Hyster-Yale (NYSE: HY) designs, manufactures, and sells materials handling equipment to various sectors.

Hyster-Yale Materials Handling reported revenues of $1.02 billion, up 1.5% year on year, falling short of analysts’ expectations by 3.8%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.

As expected, the stock is down 18.9% since the results and currently trades at $50.85.

Read our full analysis of Hyster-Yale Materials Handling’s results here.

Lincoln Electric (NASDAQ: LECO)

Headquartered in Ohio, Lincoln Electric (NASDAQ: LECO) manufactures and sells welding equipment for various industries.

Lincoln Electric reported revenues of $983.8 million, down 4.8% year on year. This number met analysts’ expectations. More broadly, it was a mixed quarter as it also produced an impressive beat of analysts’ adjusted operating income estimates but a significant miss of analysts’ organic revenue estimates.

The stock is down 1.7% since reporting and currently trades at $193.98.

Read our full, actionable report on Lincoln Electric here, it’s free.

Snap-on (NYSE: SNA)

Founded in 1920, Snap-on (NYSE: SNA) is a global provider of tools, equipment, and diagnostics for various industries such as vehicle repair, aerospace, and the military.

Snap-on reported revenues of $1.25 billion, flat year on year. This result surpassed analysts’ expectations by 7.8%. It was a very strong quarter as it also put up a solid beat of analysts’ organic revenue estimates and a decent beat of analysts’ EPS estimates.

The stock is up 16.1% since reporting and currently trades at $346.01.

Read our full, actionable report on Snap-on here, it’s free.

Market Update

Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.

Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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