Snap-on Incorporated SNA has experienced a strong surge in its stock price, rising 31.5% over the past three months, significantly outperforming the industry’s growth of 17.2%. This impressive performance can be attributed to the company’s effective value-creation plan and successful cost-saving initiatives, which have helped it outperform the broader sector, which has gained 18.5% during the same period.
Image Source: Zacks Investment Research
Closing at $366.88 yesterday, SNA stock is moving toward its 52-week high of $373.90 attained on Nov. 27, 2024. Snap-on has shown solid upward momentum, currently trading above its 50-day and 200-day simple moving averages, which are key indicators of price stability and long-term bullish trends. This technical strength, coupled with continued momentum, signals positive market sentiment and growing investor confidence in the company's financial health and growth potential.
Image Source: Zacks Investment Research
Snap-On's Growth Strategy and Value-Creation Initiatives
Snap-on's robust business model is central to its success, driving improvements in safety, service quality, customer satisfaction and innovation. The company’s growth strategy focuses on three critical areas, namely enhancing the franchise network, improving relationships with repair shop owners and managers and expanding the critical industries in emerging markets.
Snap-on is dedicated to various strategic principles and processes aimed at creating value in areas like Rapid Continuous Improvement (RCI). The RCI process is designed to enhance organizational effectiveness and minimize costs, besides helping Snap-on to boost sales and margins and generate savings.
Savings from the RCI initiative reflect gains from the continuous productivity and process improvement plans. Management intends to boost customer services and enhance manufacturing and supply chain capabilities through the RCI initiatives and other investments. In addition to its operational efficiencies, Snap-on continues to innovate, investing in new products and increasing brand awareness globally.
Snap-on's business trends in the third quarter of 2024 have been strong, particularly in the automotive repair sector. The company has been adapting to the increasing complexity of new vehicle models, which feature advanced drivetrains, motor configurations and high-tech electrical systems.
The automotive repair segment has seen significant growth, driven by ongoing investments in infrastructure by OEMs, dealerships and independent garages. These investments are focused on renovating service bays, upgrading repair equipment and expanding shop capacities to address the growing complexity of vehicles and the rising demand for repair work.
SNA’s Promising Outlook
Snap-on continues investing in the tools and equipment. This will expand the capabilities to support the influx of new models and the complexity of repair. Snap-on’s RS&I Group has expanded its reach into OEM dealership programs and reinforced its position across the independent garages. Thus, the possibility with the repair shop owners and managers remains solid, and the company is well poised to grab such opportunities.
The Tools Group is focused on product development, manufacturing changes and selling efforts in the near term. The critical industries remain robust and have various opportunities. Torque also continues to rise in importance with critical industry customers. The company’s industrial division has been doing well, with an upward trajectory and robust profitability catering to the growing demand for customized solutions. Such strengths are likely to bolster sales and profits.
Management expects the company’s markets and operations to have considerable resilience against the uncertainties of the operating landscape. For the rest of 2024, SNA anticipates progress along its defined runways for growth. SNA expects continued progress by leveraging capabilities in the automotive repair arena and expanding its customer base in automotive repair and across geographies, including critical industries.
Investment Opinion on SNA Stock
Snap-on's impressive stock rally reflects strong momentum, driven by its Value-Creation Initiatives, service quality, customer satisfaction and innovation. Buoyed by these efforts, the company is well-poised to achieve its long-term growth objectives. As a result, Snap-on's stock is performing robustly in the market, currently holding a Zacks Rank #2 (Buy).
Three Stocks Showing Potential
Some other top-ranked stocks are Wolverine World Wide WWW, Gildan Activewear Inc. GIL and Steven Madden, Ltd. SHOO.
Wolverine World Wide designs, manufactures and distributes a wide variety of casual and active apparel and footwear. The company sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for WWW’s current financial-year sales indicates a decline of almost 23% from the year-ago reported figures. The consensus mark for EPS reflects significant growth to 89 cents from 5 cents reported in the prior year. WWW has a trailing four-quarter earnings surprise of 17.03%, on average.
Gildan Activewear manufactures and sells various apparel products in the United States, North America, Europe, the Asia Pacific and Latin America. It carries a Zacks Rank of 2 at present. GIL has a trailing four-quarter earnings surprise of 5.4%, on average.
The consensus estimate for Gildan Activewear’s current financial year sales and earnings indicates advancements of 1.5% and 15.6%, respectively, from the prior-year figures.
Steven Madden designs, sources, markets and sells fashion-forward, name-brand and private-label footwear. It currently has a Zacks Rank #2.
The Zacks Consensus Estimate for Steven Madden’s 2024 earnings and sales indicates growth of 8.6% and 13.4%, respectively, from the year-ago actuals. SHOO has a trailing four-quarter average earnings surprise of 9.8%.
Only $1 to See All Zacks' Buys and Sells
We're not kidding.
Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.
Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.
See Stocks Now >>Snap-On Incorporated (SNA) : Free Stock Analysis Report
Wolverine World Wide, Inc. (WWW) : Free Stock Analysis Report
Gildan Activewear, Inc. (GIL) : Free Stock Analysis Report
Steven Madden, Ltd. (SHOO) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
