Value
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 3.3 |
| P/S | 9.7 |
| EV/EBITDA | 4.4 |
| Fwd P/E | 8.1 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 14.8x
- ▸PEG: 0.10
SWK · Why this verdict
Why Stanley Black & Decker (SWK) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.5/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has beaten consensus earnings estimates in each of the last four quarters, with an average surprise of 56%, including a 160% beat in the most recent July 2025 quarter. Earnings | The beat streak extends into the next report, with EPS surprise remaining positive over the following 12 months. | →Stable |
| CounterThe high average surprise partly reflects deeply depressed estimates; if analyst expectations catch up, beats will narrow or reverse. | ||
Price is above the 200-day moving average with a golden cross formation, rising on-balance volume, and an RSI of 69, all pointing to short-term trend strength. Scores | Price holds above the 200-day moving average and momentum indicators remain constructive over the next six months. | →Stable |
| CounterRSI near 70 signals near-overbought conditions, and an upside of only 0.9% to take-profit means any momentum fade quickly exhausts the price target. | ||
Free cash flow is 227% of reported net income, indicating that the company converts earnings to cash far more efficiently than the headline profit figure suggests. Quality breakdown | Free cash flow conversion remains above 100% of net income over the next four quarters, supporting dividend sustainability rated at 392% coverage. | →Stable |
| CounterBelow-average reported quality scores (Piotroski 8 notwithstanding) and no identified competitive moat mean cash generation could be cyclical rather than structural. | ||
The company derives 62% of revenue from the United States and relies on sole-source suppliers for rare earth components, concentrating both demand and supply-chain risk in ways that could amplify downturns. Bear case | Revenue mix outside the United States grows to more than 40% over the next 12 months, reducing the single-geography dependency. | →Stable |
| CounterDomestic concentration is not inherently a drag during a strong US industrial cycle; the risk materializes mainly in tariff or supply-disruption scenarios. | ||
The company has beaten consensus earnings estimates in each of the last four quarters, with an average surprise of 56%, including a 160% beat in the most recent July 2025 quarter.
→StableEarnings
- Expectation
- The beat streak extends into the next report, with EPS surprise remaining positive over the following 12 months.
CounterThe high average surprise partly reflects deeply depressed estimates; if analyst expectations catch up, beats will narrow or reverse.
Price is above the 200-day moving average with a golden cross formation, rising on-balance volume, and an RSI of 69, all pointing to short-term trend strength.
→StableScores
- Expectation
- Price holds above the 200-day moving average and momentum indicators remain constructive over the next six months.
CounterRSI near 70 signals near-overbought conditions, and an upside of only 0.9% to take-profit means any momentum fade quickly exhausts the price target.
Free cash flow is 227% of reported net income, indicating that the company converts earnings to cash far more efficiently than the headline profit figure suggests.
→StableQuality breakdown
- Expectation
- Free cash flow conversion remains above 100% of net income over the next four quarters, supporting dividend sustainability rated at 392% coverage.
CounterBelow-average reported quality scores (Piotroski 8 notwithstanding) and no identified competitive moat mean cash generation could be cyclical rather than structural.
The company derives 62% of revenue from the United States and relies on sole-source suppliers for rare earth components, concentrating both demand and supply-chain risk in ways that could amplify downturns.
→StableBear case
- Expectation
- Revenue mix outside the United States grows to more than 40% over the next 12 months, reducing the single-geography dependency.
CounterDomestic concentration is not inherently a drag during a strong US industrial cycle; the risk materializes mainly in tariff or supply-disruption scenarios.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Stanley Black & Decker has delivered perfect earnings execution over four consecutive quarters, averaging a 56% upside surprise, and its technical momentum is strong despite a negative reward-to-risk ratio that limits new entry appeal at current prices.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.4 |
| ROA | 2.2 |
| Gross margin | 2.1 |
| Op margin | 2.6 |
| Net margin | 1.2 |
| Current ratio | 4.4 |
| FCF quality | 10.0 |
| Moat | 4.5 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 227% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
6.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.2 |
| EPS growth | 10.0 |
Momentum
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 1.5 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.2 |
| Price target | 5.1 |
| erm sentiment | 4.5 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
3.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.6 |
| quality rank | 1.3 |
| growth rank | 0.0 |
Technical
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.2 |
| support resistance | 1.8 |
| 52w position | 9.3 |
Risk (lower is worse)
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.1 |
| days to cover | 5.0 |
| volatility | 3.2 |
| put call | 10.0 |
| implied vol | 4.6 |
| beta | 6.3 |
| debt equity | 6.3 |
- ▸Concentration risks: 2 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 4.2 |
- ▸Perfect beat streak: 4Q
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:7.1>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:25d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.8=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.81
Upside
-12.2%
Downside
15.0%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 67, MACD bullish
EdgeCatalyst-Driven — Earnings in 25d with 4/4 beat streak
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.5 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Momentum at 7.1) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.8=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.81 — supplementary context, not the trigger for this path.
The strongest dimensions are Momentum at 7.1, Catalyst at 6.8, and Growth at 6.6; the weakest are Peer rank at 3.0, Quality at 4.1, and Technical at 4.4. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.81 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Earnings Beat Streak
Trip ifEPS surprise falls below 0% in at least 2 of the next 4 quarterly reports.
- P2Technical Momentum Breakout
Trip ifPrice drops below the 200-day moving average and remains below that level for more than 10 consecutive trading days.
- P3Free Cash Flow Quality
Trip ifFree cash flow conversion falls below 100% of net income in at least 2 of the next 4 reported quarters.
- P4Geographic Supplier Concentration
Trip ifUS revenue concentration rises above 65% of total revenue, indicating geographic diversification has declined rather than improved.