Here's Why Hold Strategy is Apt for Stanley Black & Decker Stock Now

Stanley Black & Decker, Inc. SWK is poised to benefit from its cost-reduction program, which is expected to aid the bottom line and drive margins. The program comprises a series of initiatives to resize the organization, reduce inventory and optimize the supply chain for pursuing sustainable long-term growth.Since its inception in mid-2022, this program has generated roughly $1.4 billion in pre-tax run-rate savings and reduced inventory by more than $2 billion. The company is expected to generate pre-tax run rate savings of $2 billion by the end of this year, with an adjusted gross margin of more than 35% in the long term.Stanley Black remains open to divesting its non-core operations to focus on its core businesses and drive growth. For instance, in April 2024, the company divested its STANLEY Infrastructure business to Epiroc AB for a cash consideration of $760 million. The divestment will help the company to reduce debt and support capital-allocation priorities.SWK remains committed to rewarding its shareholders handsomely through dividend payouts. In the first nine months of 2024, the company used $367.2 million for paying out dividends, reflecting an increase of 1.8% year over year. Also, in July 2024, the quarterly dividend was hiked by a penny to 82 cents per share.However, the company has been witnessing lower consumer outdoor and do-it-yourself market demand. Within the Tools & Outdoor segment, the power tools business has been subject to a slowdown in the industrial sector. The weakening automotive end market, owing to headwinds in the global automotive OEM light vehicle production, is another setback.SWK Stock’s Price PerformanceImage Source: Zacks Investment ResearchIn the past month, this Zacks Rank #3 (Hold) company's shares have lost 5% compared with the industry’s 7.8% decline.High debt levels remain another concern. Exiting the third quarter of 2024, the company’s long-term debt remained high at $5.6 billion. Its current maturities of long-term debt totaled $500.2 million. Also, its cash and cash equivalents at the end of the third quarter were $298.7 million, lower than the short-term borrowings of $387.4 million.Key PicksSome better-ranked stocks from the Zacks Industrial Products sector are discussed below.Generac Holdings GNRC presently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The company delivered a trailing four-quarter average earnings surprise of 10.8%. In the past 60 days, the consensus estimate for GNRC’s 2024 earnings has increased 0.6%.Alarm.com Holdings ALRM currently sports a Zacks Rank of 2 (Buy). ALRM delivered a trailing four-quarter average earnings surprise of 19.6%.In the past 60 days, the Zacks Consensus Estimate for ALRM’s 2024 earnings has increased 7.2%.Applied Industrial Technologies AIT presently carries a Zacks Rank #2. AIT delivered a trailing four-quarter average earnings surprise of 5%.In the past 60 days, the consensus estimate for AIT’s 2024 earnings has inched up 0.2%.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Stanley Black & Decker, Inc. (SWK): Free Stock Analysis Report Applied Industrial Technologies, Inc. (AIT): Free Stock Analysis Report Generac Holdings Inc. (GNRC): Free Stock Analysis Report Alarm.com Holdings, Inc. (ALRM): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks