SWK
Stanley Black & Decker, Inc.
$76.46
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Fair Value
Trading 21.8% below fair value
You pay
$76.46
Bear
$78.18
Fair
$97.73
Bull
$117.28
Bear
$78.18
+2.3%
$6.76 × 12x P/E
Fair
$97.73
+27.8%
$6.76 × 15x P/E
Bull
$117.28
+53.4%
$6.76 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
11.3x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $89.17 from 37 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $97.73 per share.
Warnings
The company's reported profits differ from official accounting profits by 155%. Check what costs are being left out of the adjusted number.
The company pays out 125% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $47.90 (below our primary estimate by 53%). Large gaps may signal the dividend doesn't reflect full earning power.
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