Analysts at Deutsche Bank reiterated Buy rating on the shares of Stanley Black & Decker, Inc. (NYSE: SWK) as the latter’s management noted that they are interested in spending cash that is trapped overseas through European mergers and acquisitions. They set a price target of $90 for the stock.
DB analysts state that SWK’s management has become increasingly focused around Convergent Security. They state that following the deal, there would be less synergy between Resi and Commercial security since the customer sale process is quite different. They add that the integration between SWK, and Black and Decker is occurring within tools and machinery security and not Convergent Security. They state that the firm has failed to embed any benefit from a macro recovery in its FY2011 guidance. They believe that SWK’s management is not seeing downside relative to their expectations. They state that the company’s guidance for 80 percent price realization during the second half of 2011 is based entirely on negotiations. They add that there could be upside to fiscal 2011 fourth-quarter margin and the FY2012 margin should remain at current levels.
On a year-to-date basis, SWK’s share performance is 0.40 percent, and as compared to Standard & Poor’s 500, its YTD share performance is -0.65 percent.
Stanley Black & Decker is a diversified global provider of hand tools, power tools and related accessories. It has a market capitalization of $11.29 billion, and P/E ratio of 15.470. It has 168 million outstanding shares.
Shares of SWK added 0.10 percent or 7 cents to trade at $67.80 in the closing session.
