Stanley Black & Decker To Open CRAFTSMAN Plant In Fort Worth
Zacks Investment Research | May 16, 2019 04:32AM ET
Stanley Black & Decker, Inc. (NYSE:SWK) recently announced its plan to open a new CRAFTSMAN manufacturing plant in Fort Worth, TX. Notably, the ground breaking for the 425,000-square-foot plant is likely to occur in summer 2019, and is projected to be finished in late 2020.
The company noted that the new plant, which will employ about 500 employees, will help in manufacturing various CRAFTSMAN mechanics tools like ratchets, sockets, wrenches and general sets. The new plant will also display state-of-the-art manufacturing technologies that can improve the productivity and sustainability of the company’s operations.
Stanley Black & Decker boosted its global tools and storage brands with the CRAFTSMAN acquisition (March 2017), and has created business opportunities, especially in the lawn and garden end markets. Notably, this latest move aligns with the company’s motto of strengthening foothold in markets and improve production. As a matter of fact, the company anticipates generating $1 billion in sales from CRAFTSMAN products by 2021.
Also, last month, the company unveiled an Advanced Manufacturing Center of Excellence facility, dubbed as "Manufactory 4.0," in Hartford, CT. As part of its global Industry 4.0 "smart factory" initiative, the 23,000-square-foot facility will support the company in adopting cutting-edge manufacturing technologies as well as train and educate workforce for gaining experience with these technologies.
Our Take
Stanley Black & Decker’s market expansion strategies are expected to be key growth drivers, going forward. In this regard, brands like Newell Tools has been strengthening the company’s tools business through deeper penetration into markets worldwide. In addition, the buyout of industrial business of Nelson Fastener Systems (April 2018) has been strengthening its Engineered Fastening business, and will be accretive to earnings.
For 2019, the company anticipates generating organic sales growth of about 4%. Supported by healthy sales growth, cost-saving actions and lower share count, adjusted earnings are predicted to be $8.45-$8.65 per share. This projection reflects rise of 4-6% from the year-ago reported figure.
Over the past six months, this Zacks Rank #3 (Hold) stock yielded a return of 6.5%, outperforming 2.1% growth recorded by industry .
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However, the company is currently dealing with adverse impact of rising cost of sales, primarily due to commodity inflation, unfavorable impact of foreign currency movements and tariffs.
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