STANLEY BLACK & DECKER, INC. (SWK): what the price assumes

In the published model solve dated 2026-Q2, anchored at $97.80, STANLEY BLACK & DECKER, INC. (SWK) is priced for +15.1% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-11.

Generated: 2026-08-30 · Source: https://boothcheck.com/report/SWK

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

Solve inputs: computed at a 11.2% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.3%); the inversion above states its own rate.

Per-Model Detail (n=16)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Operating profit is negative or near zero and the company has no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so years-to-repay cannot be computed honestly.

Operating profit is negative or near zero and there is no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so interest coverage cannot be computed honestly.

Bullet Takeaways

• Stanley Black & Decker is two businesses in one ticker: a Tools & Outdoor franchise built on what the 10-K calls brands "DEWALT®, CRAFTSMAN®, and STANLEY®, supported by a broader portfolio of complementary brands", and an Engineered Fastening segment the same filing says "serves end markets with GDP-plus growth profiles" (accession 0000093556-26-000009).
• The tension is that no family of valuation method reaches today's $88.21 on trailing numbers, so the price rests on the margin-recovery plan: management is guiding to a 35%-plus adjusted gross margin by the fourth quarter of 2026 while GAAP earnings run at $2.44 per share trailing.
• Watch the quarterly gross-margin progression against that target and the tariff assumptions behind it; the first quarter beat with adjusted EPS of $0.80 against a $0.59 consensus and a reaffirmed $4.90 to $5.70 full-year adjusted EPS guide.

Bull Case

What trailing numbers miss about Stanley Black & Decker is that the income statement is still wearing the costs of a turnaround while the recovery is already reporting in. GAAP earnings of $2.44 per share over the trailing year describe a company mid-surgery: restructuring, supply-chain rebuild, tariff mitigation. The first quarter showed the post-surgery run rate instead, with adjusted EPS of $0.80 against a $0.59 consensus and revenue of $3.85 billion topping the $3.75 billion estimate, results the new CEO called ahead of the company's own expectations on both lines. Management reaffirmed a full-year adjusted EPS guide of $4.90 to $5.70, roughly 13% growth at the midpoint, built on approximately 150 basis points of gross-margin expansion this year on the way to a 35%-plus adjusted gross margin by the fourth quarter. If those adjusted earnings are the true forward economics, the trailing multiple the valuation methods are reading is an artifact.

The franchise underneath is not in dispute. The 10-K anchors Tools & Outdoor on "DEWALT®, CRAFTSMAN®, and STANLEY®, supported by a broader portfolio of complementary brands" (accession 0000093556-26-000009), a brand stack with shelf position that peers spend decades failing to replicate, and describes an active tariff playbook in which "the Company is continuing to execute its plan with the objective to safeguard gross margins and position the business for success" (same accession). On the call, management quantified the current environment as roughly neutral: tariff policy changes net out as a tailwind on a gross basis, offset by inflation for the year. A company that can hold guidance flat through a tariff regime change has pricing power showing up where it counts.

Capital allocation quietly supports the story. The share count has fallen about 2% a year over the past four years, the dividend runs $3.31 per share, and the Engineered Fastening segment gives the portfolio a second engine the filing frames around "highly engineered components and automation systems in the automotive, general" industrial markets (accession 0000093556-26-000009), end markets with different cycle timing than DIY tools. The bull case is straightforward: the brands never left, the margin structure is being rebuilt in public on a stated schedule, and the stock is priced off the scar tissue rather than the guide.

Bear Case

Start with what the valuation methods actually say, because for once they agree, and what they agree on is uncomfortable. No family of method reaches today's price. Asset-based approaches land at roughly a quarter of the $88.21 quote, earnings-power reads at roughly a third, peer multiples about 35% below, and even the forward-growth methods, the ones designed to give a recovery credit, sit about a quarter short as a family. When the generous methods and the conservative methods disagree, there is an argument to have; when they all fall short, the price is resting on something none of them can see. The conservative reads are the honest ones here because they measure what the company has actually delivered: a 4.1% trailing return on equity and $726 million of free cash flow against a $13.4 billion market value.

The gap between GAAP and the guide is the whole bet. Trailing GAAP earnings run $2.44 per share; the reaffirmed adjusted guide is $4.90 to $5.70. That spread has to close from the GAAP side for the price to work, and the path runs through a margin plan with external dependencies the company itself catalogs. The 10-K concedes that finding qualified suppliers "in a timely, cost-effective and efficient manner is a significant challenge with the increasing demand from customers, especially with respect to goods sourced from non-U.S. suppliers", and that "increased demand for battery technology may also increase the costs to the Company for both the battery cells as well as the underlying raw materials such as cobalt and lithium" (accession 0000093556-26-000009). Management's own guidance framework assumes new Section 301 tariffs eventually arrive at levels similar to the prior regime, making today's lower rates a temporary tailwind. A margin target built on tariff assumptions is a target the White House can amend.

Meanwhile the balance sheet narrows the escape routes. Net debt of $6.2 billion runs about 4.3 times trailing operating income on a pre-tax basis with interest coverage of 2.9 times, and the $3.31 dividend plus continued buybacks consume cash the deleveraging also wants. The price implies operating profit compounding near 12% a year for five years; only about half of comparable fast-growers historically sustained that for the duration, and this particular company must do it while housing-linked tool demand stays soft enough that revenue guidance was trimmed on timing this year. If the margin march stalls at 33% instead of 35%, the adjusted story deflates into the GAAP one, and the GAAP one is what every method already priced.

Valuation

The distinctive fact about Stanley Black & Decker's valuation is unanimity: at $88.21, every family of method finds the price rich on trailing numbers. Asset-value reads sit at roughly a quarter of the price, weighed down by a 4.1% trailing return on equity against $58.91 of book value per share. Earnings-power methods land around a third of it, reading $2.44 of trailing GAAP earnings and $726 million of free cash flow at face value. Peer multiples come in about 35% light, and the forward-growth family, which is structurally the most forgiving, still sits about a quarter below as a group, with only the most aggressive dividend-growth variant reaching the quote. The price is a bet beyond what any standard frame supports, which in practice means it is a bet on the adjusted earnings guide of $4.90 to $5.70 becoming the GAAP reality.

The embedded requirement is concrete. Today's quote pays about 14 times operating income, implying roughly 12% annual operating-profit growth for five years from a business earning a 9.4% operating margin now, and while that multiple sits in the lower half of the peer range, only about half of comparable fast-growers historically held such a pace that long. The company's own filing supplies the inputs the recovery leans on: the two-segment structure of Tools & Outdoor and Engineered Fastening, the latter serving "end markets with GDP-plus growth profiles", and a stated tariff-response plan aimed to "safeguard gross margins" (accession 0000093556-26-000009). Solvency bounds the downside without threatening it: $6.2 billion of net debt at about 4.3 times pre-tax operating income and 2.9 times interest coverage is manageable for a consumer-brands cash generator but leaves little slack, while the share count falling 2% a year shows management still returning capital through the rebuild. The decisive number is the gross margin line each quarter between now and the fourth-quarter 35% checkpoint; everything else in the price is downstream of it.

Catalysts

The margin checkpoint calendar is the catalyst path. Management has committed to roughly 150 basis points of gross-margin expansion in 2026 and a 35%-plus adjusted gross margin by the fourth quarter, on the way to 35% to 37% by the end of 2028. Each quarterly print between now and year-end is a public reading against that schedule, and the second-quarter report, due on the company's usual late-July cadence, is the next one. The first quarter cleared its bar comfortably: adjusted EPS of $0.80 against a $0.59 consensus, revenue of $3.85 billion against $3.75 billion expected, and a reaffirmed full-year adjusted EPS guide of $4.90 to $5.70 with revenue trimmed slightly on timing.

Tariff policy is the live external variable. Management told investors that updated tariff assumptions net to a gross tailwind this year, roughly offset by inflation, and that the guidance framework assumes new Section 301 tariffs eventually arrive at levels similar to the prior IEEPA regime. Any formal Section 301 action, in either direction, forces a guidance re-mark. The other thread to follow is execution under the leadership transition: CEO Chris Nelson framed the first quarter as a solid start, and his margin plan now owns the 2026 targets his predecessor's restructuring set up. With the dividend at $3.31 per share and the buyback shrinking the count about 2% annually, the capital-return program continues to pay holders while the margin evidence accumulates.

Peer Cohorts (Per Segment, With Filing Citations)

Tools & Outdoor (reported)

• TTC (THE TORO COMPANY)
• FY2025 10-K: …construction markets are sold to dealers and rental companies, as well as direct to end-users in certain markets. Landscape contractor turf products are also sold to dealers. Snow and ice management products are primarily sold to distributors and dealers for resale to contractors. Residential segment products, such…
• FY2025 10-K: …and all-wheel drive articulating tractors, sidewalk snow and ice solution vehicles, and related attachments and accessories. These products are mainly sold through distributors and dealers who market and sell to end-customers primarily consisting of landscape contractors, municipalities, and other government…
• SNA (Snap-on Inc)
• FY2025 10-K: …impact wrenches, ratchets, screwdrivers, drills, sanders, grinders and other similar products. Tool storage includes tool chests, roll cabinets and other similar products. For many industrial customers, Snap-on creates specific, engineered solutions, including facility-level tool control and asset management hardware…
• FY2025 10-K: …Fish and Hook Saw blades, cutting tools, pruning tools, hand tools, power tools and tool storage Hofmann Wheel balancers, vehicle lifts, tire changers, wheel aligners, brake testers and test lane equipment Irimo Saw blades, cutting tools, hand tools, power tools and tool storage John Bean Wheel balancers, vehicle…
• MAS (Masco Corporation)
• FY2025 10-K: …Products segment, which are aggregated by product similarity. Our Decorative Architectural Products segment is impacted by seasonality and normally experiences stronger sales during the second and third calendar quarters, corresponding with the peak season for repair and remodel activity. 2 Plumbing Products The…
• FY2025 10-K: PEX tubing to manufacturers, distributors and wholesalers for use in diverse applications that include faucets and plumbing supplies, appliances and building products. We believe that our plumbing products are among the leaders in sales in North America and Europe. Competitors of the majority of our products in this…
• GGG (GRACO INC.)
• FY2025 10-K: …then supply to their customers. Industrial The Industrial division designs and manufactures liquid finishing and advanced fluid dispensing equipment; pumps to move chemicals, petroleum, food, and other fluids; and systems, components, and accessories for the automatic lubrication of bearings, gears, and generators.…
• FY2025 10-K: …has been recast to conform to the current organizational structure. The Company has four operating segments which are aggregated into three reportable segments: Contractor, Industrial and Expansion Markets. The Contractor segment markets sprayers and equipment that apply paint to walls and other structures, texture…
• AOS (A. O. Smith Corporation)
• FY2025 10-K: …lines of residential and commercial gas and electric water heaters, boilers, heat pumps, tanks and water treatment products. Both segments primarily manufacture and market in their respective regions of the world. Our Rest of World segment is primarily comprised of China, India, and Europe. NORTH AMERICA Sales in our…
• FY2025 10-K: …osmosis products. We also offer a comprehensive line of commercial water treatment and filtration products. Typical applications for our water treatment products include residences, restaurants, schools and offices. Other. In our North America segment, we also manufacture expansion tanks, commercial solar water…
• FBIN (Fortune Brands Innovations, Inc.)
• FY2025 10-K: …faucets, accessories, luxury hardware, kitchen sinks and waste disposals, predominantly under the Moen, ROHL, Riobel, Victoria+Albert, Perrin & Rowe, Aqualisa, Shaws, Emtek, Schaub and SpringWell brands. The Outdoors segment includes fiberglass and steel entry door systems under the Therma-Tru brand name, storm,…
• FY2025 10-K: …tariff-related costs and lower customer sales incentives. Net sales were unfavorably impacted by foreign exchange of $2.3 million. Cost of products sold Cost of products sold decreased by $68.9 million, or 2.7%, primarily due to the lower sales volume, lower restructuring-related charges of $13.5 million and…
• NWL (NEWELL BRANDS INC.)
• FY2025 10-K: …Ball brand, pursuant to a license from Ball Corporation. Home fragrance products are sold primarily under the Chesapeake Bay, WoodWick and Yankee Candle brands. The H&CS segment primarily markets its products directly to mass merchants, warehouse clubs, home centers, department stores, drug/grocery stores, specialty…
• FY2025 10-K: &D net sales for 2025 decreased 1%, compared to prior year as soft demand primarily in the Writing business was partially offset by contributions from launches of product innovations in both the Baby and Writing businesses. Changes in foreign currency favorably impacted net sales by $4 million, or less than 1%.…

Engineered Fastening (reported)

• ITW (ILLINOIS TOOL WORKS INC)
• FY2025 10-K: …products. Businesses in this segment produce engineered adhesives, sealants, lubrication and cutting fluids, and fluids and polymers for auto aftermarket maintenance and appearance. This segment primarily serves the automotive aftermarket, general industrial and MRO markets. Products in this segment include: •…
• FY2025 10-K: …declined 2.2% primarily due to lower demand in the North American car care, body repair and tire repair businesses, partially offset by growth in the North American engine repair business and the European additives and tire repair businesses. 31 • Operating margin of 27.4% increased 70 basis points primarily driven…
• DOV (DOVER Corp)
• FY2025 10-K: …and trade volumes; an increased global focus on digitization and automation in industrial processes; increasing requirements for sustainability, safety, energy efficiency and consumer product safety; and growth of the middle class and consumption in emerging economies. • Our Engineered Products segment is…
• FY2025 10-K: Climate & Sustainability Technologies. For financial information about our segments and geographic areas, see Note 19 - Segment Information in the consolidated financial statements in Item 8 of this Form 10-K. Engineered Products Our Engineered Products segment provides a wide range of equipment, components, software,…
• PH (PARKER-HANNIFIN CORPORATION)
• FY2025 10-K: We offer hundreds of thousands of individual part numbers, and no single product contributed more than one percent to our total net sales for the year ended June 30, 2025. Listed below are some of our principal products. Diversified Industrial Segment . Our Diversified Industrial Segment products consist of a broad…
• FY2025 10-K: …we manufacture and sell. In the Diversified Industrial Segment, Parker competes based on product quality and innovation, customer experience, manufacturing and distribution capability, aftermarket support, and price competitiveness. We believe that we are one of the market leaders in most of the major markets for our…
• NDSN (NORDSON CORPORATION)
• FY2025 10-K: …drug infusion, IV & drug delivery, patient care, surgical and biopharma. • Surgical Solutions - Microplegia myocardial protection devices and related consumables used in cardiac surgical procedures. Advanced Technology Solutions This segment integrates our proprietary product technologies into the progressive stages…
• FY2025 10-K: …us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:NetInvestmentHedgingMember us-gaap:InterestExpenseMember 2023-11-01 2024-10-31 0000072331 us-gaap:ForeignExchangeContractMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:NetInvestmentHedgingMember us-gaap:InterestExpenseMember 2022-11-01 2023-10-31…
• BRC (BRC)
• FY2025 10-K: …long-term organic sales growth. • Cash flow - Objective focused on delivering strong cash flow in relation to net income. In fiscal 2025, net cash provided by operating activities was $181.2 million, or 95.7% of net income. After a review of Ms. Thornton's performance, the Committee determined that Ms. Thornton's…
• FY2025 10-K: …people identification products, microfluidic solutions products, and specialty materials • Seton, Emedco, Signals, Safety Signs Service, and Pervaco: Safety and facility identification products • PDC, PDC Healthcare, MAGiCARD, and Promovision: People and healthcare identification products • Gravotech: Laser and…
• AZZ (AZZ INC.)
• FY2025 10-K: …improvements to our manufacturing process, supply chain management, and through increases in prices to match inflationary increases where competitively feasible. We have indirect exposure to copper, aluminum, steel and nickel-based alloys in the AZZ Infrastructure Solutions segment through our 40% investment in the…
• FY2025 10-K: …our manufactured solutions. Widespread manufacturing defects and quality system failures could result in significant losses due to the costs of containment, the destruction of customer-owned inventory and lost sales due to the unavailability of a solution for a period of time. We may not be able to obtain indemnity…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.