Snap-on Up 24.5% in a Year: Should You Buy, Hold or Avoid the Stock?

Snap-on Incorporated SNA stock has been doing well for a while, recording an increase of 24.5% in a year. This growth comfortably outpaces the broader Consumer Discretionary sector’s return of 13.7% and the Zacks Tools - Handheld industry‘s growth of 11.6% in the same period.Currently priced at $345.60, Snap-on stock is trading at a 7.6% to its 52-week high of $373.90, reached on Nov. 27. However, it is trading at a 36.6% premium to its 52-week low mark.Analyzing Snap-on’s Growth EffortsSNA has been progressing well in its strategic efforts. The company has been enhancing the franchise network, improving relationships with repair shop owners and managers, and expanding into critical industries in emerging markets. Management’s emphasis on the Rapid Continuous Improvement (RCI) process has been on track. The RCI process is aimed at enhancing organizational effectiveness, reducing costs and boosting sales and margins. Savings from this initiative come from continuous productivity and process-improvement plans. Management intends to boost customer services, along with enhancing manufacturing and supply-chain capabilities, through the RCI initiatives and further investments.The company has been investing in bringing new products and increasing brand awareness across the world. Additionally, SNA’s robust business model helps enhance value-creation processes, which in turn improves safety, quality of service, customer satisfaction and innovation. Snap-on continues investing in the tools and equipment. We note that the Tools Group is focused on product development, manufacturing changes and selling efforts in the near term. The critical industries remain robust and have various opportunities.SNA's Price PerformanceImage Source: Zacks Investment ResearchBumps in SNA’s Growth TrajectoryHowever, Snap-on remains prone to macroeconomic headwinds, including geographic challenges in critical industries. Delayed financial recovery in China is acting as a deterrent. Rising cost inflation, stemming from higher raw material expenses and other costs, is another headwind that is hurting SNA’s performance.The company has been witnessing higher operating expenses due to increased personnel and other associated costs. Operating expenses rose 0.7% year over year to $335.4 million in the most recent quarter. Such expenses are likely to weigh on the company’s profitability.SNA Stock’s ValuationGoing by the price/earnings ratio, Snap-on stock is currently trading at 17.19 on a forward 12-month basis, lower than 17.58 for the industry. Also, the stock is trading lower than its five-year high of 18.63. A Value Score of B further adds strength.ConclusionMoving ahead, Snap-on expects continued progress by leveraging capabilities in the automotive repair arena as well as expanding its customer base in automotive repair and across geographies, including critical industries. The Zacks Consensus Estimate for SNA’s sales and earnings per share (EPS) indicates a rise of 3.2% and 3.6%, respectively, year over year for 2025. This highlights analysts’ confidence in this Zacks Rank #3 (Hold) stock.Key Consumer Discretionary PicksWe have highlighted three better-ranked stocks, namely, G-III Apparel Group GIII, Gildan Activewear GIL and Royal Caribbean RCL.G-III Apparel is a manufacturer, designer and distributor of apparel and accessories under licensed brands, owned brands and private label brands. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here. GIII Apparel has a trailing four-quarter earnings surprise of 113.4%, on average. The Zacks Consensus Estimate for GIII Apparel’s current financial-year sales indicates growth of 1.7% from the year-ago figure.Gildan Activewear, a manufacturer of premium quality branded basic activewear, carries a Zacks Rank of 2 (Buy) at present. GIL has a trailing four-quarter earnings surprise of 5.4%, on average. The consensus estimate for Gildan Activewear’s current financial-year EPS indicates growth of 15.6% from the year-ago figure.Royal Caribbean carries a Zacks Rank of 2 at present. RCL has a trailing four-quarter earnings surprise of 18.5%, on average.The Zacks Consensus Estimate for RCL’s 2024 sales and EPS indicates an increase of 18.7% and 72.1%, respectively, from the year-ago levels.Just Released: Zacks Top 10 Stocks for 2025Hurry – you can still get in early on our 10 top tickers for 2025. 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(GIL): 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