- Wondering if Stanley Black & Decker at around US$72 is a bargain or just fairly priced? This article walks through what the current share price might be telling you about value.
- The stock has returned 5.2% over the last 7 days, is down 2.1% over 30 days and 5.6% year to date, while still sitting on a 28.2% return over the past year and 2.5% over three years, compared with a 58.2% decline across five years.
- Recent coverage has focused on how the share price performance compares with longer term levels and what that might imply about shifting expectations for the business. This context helps frame whether the current price near US$72.19 reflects caution after past weakness or renewed confidence after the last year’s rebound.
- Simply Wall St currently gives Stanley Black & Decker a 5 out of 6 valuation score. The rest of this article will walk through the key valuation methods behind that number, before finishing with a way to think about value that goes beyond the usual ratios.
Find out why Stanley Black & Decker's 28.2% return over the last year is lagging behind its peers.
Approach 1: Stanley Black & Decker Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow model takes the cash Stanley Black & Decker is expected to generate in the future, then discounts those projected cash flows back into today’s dollars to estimate what the whole business might be worth right now.
Stanley Black & Decker’s latest twelve month free cash flow is about $652.1 million. Using a 2 Stage Free Cash Flow to Equity model, analyst estimates and extrapolated forecasts point to free cash flow of $1,171.0 million in 2029, with a series of projections between 2026 and 2035 that are discounted back to today. All figures here are in $.
Putting those cash flows together, Simply Wall St’s model arrives at an estimated intrinsic value of about $113.77 per share for Stanley Black & Decker. Compared with the recent share price around $72, the DCF output suggests the stock trades at roughly a 36.5% discount to this estimate. On this measure, it screens as undervalued.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Stanley Black & Decker is undervalued by 36.5%. Track this in your watchlist or portfolio, or discover 59 more high quality undervalued stocks.
Approach 2: Stanley Black & Decker Price vs Earnings
For profitable companies, the P/E ratio is a useful way to check what you are paying for each dollar of earnings. It often lines up with how the market weighs profitability against other options available to investors.
A “normal” or “fair” P/E usually reflects what investors are willing to pay given expectations for future earnings growth and the risk around those earnings. Higher expected growth or lower perceived risk can justify a higher P/E, while slower growth or higher risk often lines up with a lower P/E.
Stanley Black & Decker currently trades on a P/E of 27.9x. That sits close to the Machinery industry average P/E of 28.1x and above the peer average of 25.0x. To go a step further, Simply Wall St calculates a proprietary “Fair Ratio” of 38.5x. This Fair Ratio is the P/E that would be expected given factors such as Stanley Black & Decker’s earnings growth profile, industry, profit margins, market cap and company specific risks.
The Fair Ratio can be more useful than a simple comparison with peers or the industry because it adjusts for those company specific drivers rather than treating all Machinery stocks as similar. Since the Fair Ratio of 38.5x is above the current 27.9x P/E, this framework points to the shares screening as undervalued on this metric.
Result: UNDERVALUED
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Upgrade Your Decision Making: Choose your Stanley Black & Decker Narrative
Earlier it was mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St’s Community page let you attach a clear story about Stanley Black & Decker to the numbers by linking your view on its future revenue, earnings and margins to a financial forecast and a Fair Value that you can compare directly with today’s price.
Rather than relying only on a single DCF or P/E screen, Narratives help you see how a cautious view, such as a Fair Value around US$65.00 with flat revenue and a 7.0% margin assumption, and an optimistic view, such as a Fair Value around US$118.09 with stronger growth and roughly 7.3% margins, can both be grounded in explicit forecasts so you can decide which story fits your expectations.
Because these Narratives are refreshed when new information such as news or earnings is added to the platform, you can track how the Fair Value behind your chosen Stanley Black & Decker story shifts over time and use that to decide whether the current share price near US$72 is above or below what you consider reasonable.
For Stanley Black & Decker, however, we will make it really easy for you with previews of two leading Stanley Black & Decker Narratives:
🐂 Stanley Black & Decker Bull Case
Fair Value: US$118.09
Implied discount versus recent price around US$72.19: roughly 39% undervalued
Revenue growth assumption: about 4.3% a year
- Assumes meaningful margin improvement over time, supported by cost savings, localization and a higher long term net margin near 7.3%.
- Builds in steady revenue growth and a future P/E of about 19.4x, with earnings eventually reaching higher levels than today on this view.
- Aligns most closely with the higher end of analyst targets, where the current price sits below the modelled Fair Value.
🐻 Stanley Black & Decker Bear Case
Fair Value: US$65.00
Implied premium versus recent price around US$72.19: roughly 11% overvalued
Revenue growth assumption: close to 0.1% a year
- Assumes revenue stays broadly flat, with only modest margin improvement to just above 7.0% over the next few years.
- Uses a lower future P/E of about 12.5x, reflecting concerns that slower growth and cost pressures could keep valuation multiples in check.
- Lines up with the lower end of analyst targets, where the current share price is above the modelled Fair Value.
Both narratives use explicit numbers for revenue, margins, discount rates and future P/E ratios, so you can decide which set of assumptions feels closer to how you see Stanley Black & Decker.
To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Stanley Black & Decker on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.
Do you think there's more to the story for Stanley Black & Decker? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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