Intensifying Competition For Stanley Black & Decker Turns BofA Bearish

Stanley Black & Decker, Inc. SWK faces more challenges than tougher comps in the back half of 2021 and its performance is likely to be impacted over the next couple of years by rising competition and peaking margins in the power tool space, according to BofA Securities.

The Stanley Black & Decker Analyst: Ross Gilardi downgraded Stanley Black & Decker from Neutral to Underperform and reduced the price target from $187 to $175.

The Stanley Black & Decker Thesis: Although the company has been successful in protecting its margins so far, it may need to increase its R&D spend to keep up with competition, Gilardi said in the downgrade note.

“While Stanley is making inroads with Amazon AMZN and touting market share gains against the industry, its number one competitor (Techtronic) is growing much faster and fortifying its position at Home Depot HD, particularly in the outdoor space with its 40-V battery cordless Ryobi line,” the analyst said.

“Stanley is the clear category leader at Lowe’s with Craftsman and DeWalt, but faces heavier competition in outdoor battery cordless from Chervon’s EGO, which will have a bigger role at Lowe’s this year, while Stanley mulls the MTD buyout.”

SWK Price Action: Shares of Stanley Black & Decker were down 5.55% at $168.65 at last check Monday.