Is Snap-on Stock Underperforming the Nasdaq?
Kenosha, Wisconsin-based Snap-on Incorporated (SNA) manufactures and markets tools, equipment, diagnostics, and repair information and systems solutions for professional users. Valued at a market cap of $16 billion, the company serves the aviation and aerospace, natural resources, agriculture, infrastructure construction, government and military, mining, power generation, and technical education industries.
Companies worth $10 billion or more are typically classified as 'large-cap stocks,' and SNA fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the tools & accessories industry. The company is a powerhouse in professional-grade tools and equipment, renowned for its unmatched quality, innovation, and direct-to-user sales model. It sustains a premium brand reputation through rigorous innovation and robust IP, backed by over 4,000 patents and substantial R&D investments.
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This tools and equipment manufacturer has slipped 18.2% from its 52-week high of $373.90, reached on Nov. 27, 2024. Shares of SNA have declined 7.3% over the past three months, lagging behind the Nasdaq Composite's ($NASX) 9.9% return during the same time frame.
Moreover, on a YTD basis, shares of SNA are down 9.9%, compared to NASX's marginal gain. However, in the longer term, SNA has soared 13.8% over the past 52 weeks, outperforming NASX's 9.7% rise over the same time frame.
To confirm its bearish trend, SNA has been trading below its 200-day moving average since mid-April, with minor fluctuations, and has remained below its 50-day moving average since mid-December, 2024, with slight fluctuations.
On Apr. 17, shares of Snap-on plunged 8% after its weaker-than expected Q1 earnings release. The company's revenue declined 3.5% year-over-year to $1.1 billion and fell short of the consensus estimates by 5%. Moreover, its EPS of $4.51 fell 8.1% from the year-ago quarter and missed the forecasted figure by 6.2%. The disappointing performance was primarily driven by weaker results in its commercial & industrial group and tools group, with both segments reporting declines in organic sales and operating earnings.
Snap-on has outperformed its rival, Stanley Black & Decker, Inc.'s (SWK) 23.2% drop over the past 52 weeks and 19.6% fall on a YTD basis.
Despite SNA's recent underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of "Moderate Buy' from the 10 analysts covering it, and the mean price target of $345 suggests a 12.8% premium to its current price levels.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
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