Stanley Black & Decker Faces Increasing Competition, Risks Ahead: BofA

Stanley Black & Decker Faces Increasing Competition, Risks Ahead: BofA

© Reuters.  © Reuters.

By Christiana Sciaudone — Stanley Black & Decker (NYSE:SWK) dropped 4% as intensifying competition prompted a downgrade.

The stock was lowered to a sell-equivalent from neutral with a price target lowered to $175 from $187 by Bank of America (NYSE:BAC) analyst Ross Gilardi, according to StreetInsider.

Rival Techtronic is growing faster and fortifying its position at the Home Depot (NYSE:HD), and Stanley Black & Decker is facing heavier competition at Lowe's (NYSE:LOW) in outdoor battery cordless from Chervon's EGO.

SWK's likely intent to buy out the remaining 80% of MTD Products later this year or next is riskier than it appears, Gilardi wrote, according to StreetInsider.

"The business would require reinvestment by Stanley to electrify the product line," the analysts wrote "In the meantime, states like CA are considering bans on gas powered tools for environmental reasons. This is a risk to the potential $1 of EPS accretion that most investors we speak to are not even considering."

Shares are trading close to where they were a year ago, after doubling in a rally that began in March.

The stock has six buy ratings, three holds, and now Gilardi's single sell, according to data compiled by

Last month, JPMorgan (NYSE:JPM) analyst Michael Rehaut raised the price target on Stanley Black & Decker to $17 from $13, while maintaining a hold-equivalent rating, StreetInsider reported.

Stanley Black & Decker beat or met profit estimates every quarter since 2013.

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