SWK
Stanley Black & Decker, Inc.
$95.44
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 84.1% above fair value
You pay
$95.44
Bear
$41.47
Fair
$51.84
Bull
$62.21
Bear
$41.47
-56.5%
$3.46 × 12x P/E
Fair
$51.84
-45.7%
$3.46 × 15x P/E
Bull
$62.21
-34.8%
$3.46 × 18x P/E
Adjust Assumptions
15.0x
3.46$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
27.6x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (37 analysts)
$95.40
Divergence from AlphaVal
46%
Summary
Applying a 15x P/E to adjusted EPS of $3.46, the base-case value is $51.84 per share. DDM cross-check: $48.05.
Warnings
The company's reported profits differ from official accounting profits by 30%. Check what costs are being left out of the adjusted number.
The company pays out 126% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Wall Street's average price target is $95.40 (from 37 analysts). Our estimate is 46% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples